Warba Insurance and Reinsurance Co KSCP (KUW:WINSRE) Beneish M-Score : -2.34 (As of Apr. 27, 2024)

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What is Warba Insurance and Reinsurance Co KSCP 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.

Good Sign:

Beneish M-Score -2.34 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Warba Insurance and Reinsurance Co KSCP's Beneish M-Score or its related term are showing as below:

KUW:WINSRE' s Beneish M-Score Range Over the Past 10 Years
Min: -3.2 Med: -2.48 Max: -2.16
Current: -2.34

During the past 13 years, the highest Beneish M-Score of Warba Insurance and Reinsurance Co KSCP was -2.16. The lowest was -3.20. And the median was -2.48.

Warba Insurance and Reinsurance Co KSCP 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 Warba Insurance and Reinsurance Co KSCP 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 * 1.0239

0.528 * 1

0.404 * 0.9836

0.892 * 1.0873

0.115 * 0.8958

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.408

4.679 * 0.025275

0.327 * 0.9579

-2.34

* 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 (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was KWD0.34 Mil.
Revenue was 10.013 + 5.543 + 6.567 + 8.464 = KWD30.59 Mil.
Gross Profit was 10.013 + 5.543 + 6.567 + 8.464 = KWD30.59 Mil.
Total Current Assets was KWD31.79 Mil.
Total Assets was KWD92.11 Mil.
Property, Plant and Equipment(Net PPE) was KWD7.17 Mil.
Depreciation, Depletion and Amortization(DDA) was KWD0.23 Mil.
Selling, General, & Admin. Expense(SGA) was KWD4.30 Mil.
Total Current Liabilities was KWD6.35 Mil.
Long-Term Debt & Capital Lease Obligation was KWD4.00 Mil.
Net Income was 4.284 + 0.675 + 1.355 + 2.387 = KWD8.70 Mil.
Non Operating Income was 0 + 0 + 0 + -0.009 = KWD-0.01 Mil.
Cash Flow from Operations was 3.94 + 1.735 + -0.195 + 0.902 = KWD6.38 Mil.

Total Receivables was KWD0.31 Mil.
Revenue was 6.383 + 5.761 + 7.939 + 8.048 = KWD28.13 Mil.
Gross Profit was 6.383 + 5.761 + 7.939 + 8.048 = KWD28.13 Mil.
Total Current Assets was KWD28.96 Mil.
Total Assets was KWD87.72 Mil.
Property, Plant and Equipment(Net PPE) was KWD7.31 Mil.
Depreciation, Depletion and Amortization(DDA) was KWD0.21 Mil.
Selling, General, & Admin. Expense(SGA) was KWD2.81 Mil.
Total Current Liabilities was KWD6.29 Mil.
Long-Term Debt & Capital Lease Obligation was KWD4.00 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)
	=	(0.344 / 30.587)	/	(0.309 / 28.131)
	=	0.011247	/	0.010984
	=	1.0239

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)
	=	(28.131 / 28.131)	/	(30.587 / 30.587)
	=	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 - (31.791 + 7.171) / 92.106)	/	(1 - (28.959 + 7.305) / 87.724)
	=	0.576987	/	0.586613
	=	0.9836

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
	=	30.587	/	28.131
	=	1.0873

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))
	=	(0.211 / (0.211 + 7.305))	/	(0.232 / (0.232 + 7.171))
	=	0.028073	/	0.031339
	=	0.8958

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)
	=	(4.299 / 30.587)	/	(2.808 / 28.131)
	=	0.14055	/	0.099819
	=	1.408

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)
	=	((4 + 6.347) / 92.106)	/	((4 + 6.288) / 87.724)
	=	0.112338	/	0.117277
	=	0.9579

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
	=	(8.701 - -0.009	-	6.382)	/	92.106
	=	0.025275

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.

Warba Insurance and Reinsurance Co KSCP has a M-score of -2.34 suggests that the company is unlikely to be a manipulator.

Warba Insurance and Reinsurance Co KSCP Beneish M-Score Related Terms

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Warba Insurance and Reinsurance Co KSCP (KUW:WINSRE) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Warba Insurance and Reinsurance Co KSCP (KUW:WINSRE) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

Sharq, Ahmad Al Jaber Street, Derwazat Abdul Razak, P.O. Box 24282, Safat, Opposite to the Banking Complex, Warba Tower, Kuwait, KWT, 13103

Website

https://www.warba.insure

Warba Insurance and Reinsurance Co KSCP is involved in the provision of life and non-life insurance products and services. The company reports three business segments: General risk insurance, Life and Medical insurance and Investment. Within General risk insurance are Marine and Aviation, Fire and general accidents and Motor. The company's offerings include Individual Life Insurance, Medical Insurance individual, Medical Insurance Corporate and FGA Insurance Policies among others. Geographically it operates through Kuwait.