Jubilee Life Insurance Co 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 Jubilee Life Insurance Co for today is based on a combination of the following eight different indices:
| M | = | -4.84 | + | 0.92 * DSRI | + | 0.528 * GMI | + | 0.404 * AQI | + | 0.892 * SGI | + | 0.115 * DEPI |
| = | -4.84 | + | 0.92 * 0.9097 | + | 0.528 * 1 | + | 0.404 * 1.0025 | + | 0.892 * 1.288 | + | 0.115 * 1.127 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9815 | + | 4.679 * 0.102208 | - | 0.327 * 0.8278 |
| = | -1.75 |
* 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 (Dec24) TTM: | Last Year (Dec23) TTM: |
Total Receivables was ₨8,217 Mil.
Revenue was 31027.063 + 28485.281 + 21135.09 + 20122.606 = ₨100,770 Mil.
Gross Profit was 31027.063 + 28485.281 + 21135.09 + 20122.606 = ₨100,770 Mil.
Total Current Assets was ₨0 Mil.
Total Assets was ₨236,764 Mil.
Property, Plant and Equipment(Net PPE) was ₨4,301 Mil.
Depreciation, Depletion and Amortization(DDA) was ₨596 Mil.
Selling, General, & Admin. Expense(SGA) was ₨4,844 Mil.
Total Current Liabilities was ₨0 Mil.
Long-Term Debt & Capital Lease Obligation was ₨816 Mil.
Net Income was 835.638 + 516.532 + 672.747 + 548.967 = ₨2,574 Mil.
Non Operating Income was 524.517 + 0 + 0 + 0 = ₨525 Mil.
Cash Flow from Operations was -3057.344 + -5049.323 + -7298.167 + -6744.986 = ₨-22,150 Mil.
|
Total Receivables was ₨7,013 Mil.
Revenue was 25139.484 + 21184.847 + 16775.645 + 15135.273 = ₨78,235 Mil.
Gross Profit was 25139.484 + 21184.847 + 16775.645 + 15135.273 = ₨78,235 Mil.
Total Current Assets was ₨0 Mil.
Total Assets was ₨205,490 Mil.
Property, Plant and Equipment(Net PPE) was ₨4,230 Mil.
Depreciation, Depletion and Amortization(DDA) was ₨672 Mil.
Selling, General, & Admin. Expense(SGA) was ₨3,832 Mil.
Total Current Liabilities was ₨0 Mil.
Long-Term Debt & Capital Lease Obligation was ₨855 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) |
| = | (8217.098 / 100770.04) | / | (7013.117 / 78235.249) |
| = | 0.081543 | / | 0.089641 |
| | = | 0.9097 |
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) |
| = | (78235.249 / 78235.249) | / | (100770.04 / 100770.04) |
| = | 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 - (0 + 4301.161) / 236764.098) | / | (1 - (0 + 4230.06) / 205490.272) |
| = | 0.981834 | / | 0.979415 |
| | = | 1.0025 |
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 |
| = | 100770.04 | / | 78235.249 |
| | = | 1.288 |
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)) |
| = | (672.422 / (672.422 + 4230.06)) | / | (596.01 / (596.01 + 4301.161)) |
| = | 0.13716 | / | 0.121705 |
| | = | 1.127 |
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) |
| = | (4844.352 / 100770.04) | / | (3831.883 / 78235.249) |
| = | 0.048073 | / | 0.048979 |
| | = | 0.9815 |
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) |
| = | ((815.775 + 0) / 236764.098) | / | ((855.431 + 0) / 205490.272) |
| = | 0.003446 | / | 0.004163 |
| | = | 0.8278 |
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 |
| = | (2573.884 - 524.517 | - | -22149.82) | / | 236764.098 |
| | = | 0.102208 |
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.
Jubilee Life Insurance Co has a M-score of -1.75 signals that the company is likely to be a manipulator.
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