Geneva Financial (Geneva Financial) Beneish M-Score : 0.00 (As of Apr. 26, 2024)

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What is Geneva Financial Beneish M-Score?

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

The historical rank and industry rank for Geneva Financial's Beneish M-Score or its related term are showing as below:

During the past 8 years, the highest Beneish M-Score of Geneva Financial was 0.00. The lowest was 0.00. And the median was 0.00.

Geneva Financial Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Geneva Financial for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 2.0639

0.528 * 1

0.404 * 1.0054

0.892 * 0.3716

0.115 * 0.8838

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 2.9624

4.679 * 0.146112

0.327 * 1.0239

-1.73

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Mar04) TTM:

Last Year (Mar03) TTM:

Total Receivables was $0.88 Mil.
Revenue was 0.265 + -0.088 + 0.034 + 0.032 = $0.24 Mil.
Gross Profit was 0.265 + -0.088 + 0.034 + 0.032 = $0.24 Mil.
Total Current Assets was $2.78 Mil.
Total Assets was $37.44 Mil.
Property, Plant and Equipment(Net PPE) was $0.43 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.19 Mil.
Selling, General, & Admin. Expense(SGA) was $3.90 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $31.77 Mil.
Net Income was 0.213 + -0.418 + 0.113 + 0.49 = $0.40 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was -5.628 + 12.282 + -10.23 + -1.497 = $-5.07 Mil.

Total Receivables was $1.14 Mil.
Revenue was 0.144 + 0.246 + 0.163 + 0.101 = $0.65 Mil.
Gross Profit was 0.144 + 0.246 + 0.163 + 0.101 = $0.65 Mil.
Total Current Assets was $2.33 Mil.
Total Assets was $31.22 Mil.
Property, Plant and Equipment(Net PPE) was $0.49 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.18 Mil.
Selling, General, & Admin. Expense(SGA) was $3.55 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $25.87 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI	=	(Receivables_t / Revenue_t)	/	(Receivables_t-1 / Revenue_t-1)
	=	(0.875 / 0.243)	/	(1.141 / 0.654)
	=	3.600823	/	1.744648
	=	2.0639

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI	=	GrossMargin_t-1	/	GrossMargin_t
	=	(GrossProfit_t-1 / Revenue_t-1)	/	(GrossProfit_t / Revenue_t)
	=	(0.654 / 0.654)	/	(0.243 / 0.243)
	=	1	/	1
	=	1

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (2.775 + 0.427) / 37.444)	/	(1 - (2.332 + 0.491) / 31.216)
	=	0.914486	/	0.909566
	=	1.0054

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI	=	Sales_t	/	Sales_t-1
	=	Revenue_t	/	Revenue_t-1
	=	0.243	/	0.654
	=	0.3716

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI	=	(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))	/	(Depreciation_t / (Depreciaton_t + PPE_t))
	=	(0.179 / (0.179 + 0.491))	/	(0.185 / (0.185 + 0.427))
	=	0.267164	/	0.302288
	=	0.8838

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI	=	(SGA_t / Sales_t)	/	(SGA_t-1 /Sales_t-1)
	=	(3.902 / 0.243)	/	(3.545 / 0.654)
	=	16.057613	/	5.420489
	=	2.9624

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((31.772 + 0) / 37.444)	/	((25.87 + 0) / 31.216)
	=	0.84852	/	0.828742
	=	1.0239

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA	=	(IncomefromContinuingOperations_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(NetIncome_t - NonOperatingIncome_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(0.398 - 0	-	-5.073)	/	37.444
	=	0.146112

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Geneva Financial has a M-score of -1.73 signals that the company is likely to be a manipulator.

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Geneva Financial (Geneva Financial) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Geneva Financial Corp (OTCPK:GNVN) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

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Address

Website

Geneva Financial is the holding company of Geneva Mortgage. The company provides a variety of residential mortgage products primarily to credit borrowers seeking conventional or FHA/VA loans. The company has expanded its mortgage banking activities by opening a wholesale division, increasing its sub-prime mortgage originations, establishing a program to provide short-term funding to independent real estate contractors, and expanding its retail loan operations on the Internet.

Executives

Stanley Kreitman

director, 10 percent owner, officer: Chairman of the Board

PO BOX 575 UNDERHILL BOULEVARD, SYOSSET NY 11791