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Great-West Lifeco (LTS:0AH3) Beneish M-Score : -2.08 (As of Mar. 15, 2025)


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What is Great-West Lifeco 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 -2.08 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

LTS:0AH3' s Beneish M-Score Range Over the Past 10 Years
Min: -2.97   Med: -2.37   Max: -2.08
Current: -2.08

During the past 13 years, the highest Beneish M-Score of Great-West Lifeco was -2.08. The lowest was -2.97. And the median was -2.37.


Great-West Lifeco 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 Great-West Lifeco 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 * 1.4354+0.528 * 1+0.404 * 1.0001+0.892 * 0.794+0.115 * 0.9677
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0+4.679 * -0.000849-0.327 * 0.9365
=-2.08

* 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 C$6,600 Mil.
Revenue was -960 + 10644 + 5135 + 2398 = C$17,217 Mil.
Gross Profit was -960 + 10644 + 5135 + 2398 = C$17,217 Mil.
Total Current Assets was C$0 Mil.
Total Assets was C$802,163 Mil.
Property, Plant and Equipment(Net PPE) was C$1,446 Mil.
Depreciation, Depletion and Amortization(DDA) was C$556 Mil.
Selling, General, & Admin. Expense(SGA) was C$0 Mil.
Total Current Liabilities was C$0 Mil.
Long-Term Debt & Capital Lease Obligation was C$9,705 Mil.
Net Income was 1149 + 891 + 1038 + 992 = C$4,070 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = C$0 Mil.
Cash Flow from Operations was 2000 + 963 + 1535 + 253 = C$4,751 Mil.
Total Receivables was C$5,791 Mil.
Revenue was 10638 + 1441 + 2075 + 7530 = C$21,684 Mil.
Gross Profit was 10638 + 1441 + 2075 + 7530 = C$21,684 Mil.
Total Current Assets was C$0 Mil.
Total Assets was C$713,230 Mil.
Property, Plant and Equipment(Net PPE) was C$1,374 Mil.
Depreciation, Depletion and Amortization(DDA) was C$505 Mil.
Selling, General, & Admin. Expense(SGA) was C$4,807 Mil.
Total Current Liabilities was C$0 Mil.
Long-Term Debt & Capital Lease Obligation was C$9,215 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)
=(6600 / 17217) / (5791 / 21684)
=0.383342 / 0.267063
=1.4354

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)
=(21684 / 21684) / (17217 / 17217)
=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 + 1446) / 802163) / (1 - (0 + 1374) / 713230)
=0.998197 / 0.998074
=1.0001

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
=17217 / 21684
=0.794

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))
=(505 / (505 + 1374)) / (556 / (556 + 1446))
=0.26876 / 0.277722
=0.9677

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)
=(0 / 17217) / (4807 / 21684)
=0 / 0.221684
=0

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)
=((9705 + 0) / 802163) / ((9215 + 0) / 713230)
=0.012099 / 0.01292
=0.9365

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
=(4070 - 0 - 4751) / 802163
=-0.000849

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.

Great-West Lifeco has a M-score of -2.08 suggests that the company is unlikely to be a manipulator.


Great-West Lifeco Beneish M-Score Related Terms

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Great-West Lifeco Business Description

Address
100 Osborne Street North, Winnipeg, MB, CAN, R3C 1V3
Great-West Lifeco provides life insurance, health insurance, retirement products, asset management, recordkeeping services, and reinsurance products in Canada, the United States, and Europe. The Canada business contributes approximately 31% of adjusted earnings and has leading market positions in group insurance, group retirement, and individual insurance. The company operates the second-largest recordkeeping business under the Empower brand in the United States, with an earnings contribution from the country approximating 26%. Great-West Lifeco also offers various products across Europe markets with a strong presence in the UK, Ireland, and Germany. The Europe segment contributed around 21% of adjusted earnings and the reinsurance business accounts for around 22% of adjusted earnings.