The Cigna Group 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 The Cigna Group 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 * 1.2624 | + | 0.528 * 1 | + | 0.404 * 1.0035 | + | 0.892 * 1.2088 | + | 0.115 * 1.0479 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.8661 | + | 4.679 * -1.015205 | - | 0.327 * 1.0215 |
| = | -6.78 |
* 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 (Sep24) TTM: | Last Year (Sep23) TTM: |
Total Receivables was MXN638,025 Mil.
Revenue was 1236019.203 + 1107908.23 + 919747.856 + 867044.587 = MXN4,130,720 Mil.
Gross Profit was 1236019.203 + 1107908.23 + 919747.856 + 867044.587 = MXN4,130,720 Mil.
Total Current Assets was MXN0 Mil.
Total Assets was MXN3,103,959 Mil.
Property, Plant and Equipment(Net PPE) was MXN70,767 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN51,602 Mil.
Selling, General, & Admin. Expense(SGA) was MXN268,618 Mil.
Total Current Liabilities was MXN0 Mil.
Long-Term Debt & Capital Lease Obligation was MXN595,238 Mil.
Net Income was 14551.132 + 28359.519 + -4597.163 + 17466.501 = MXN55,780 Mil.
Non Operating Income was 950726.446 + 826254.966 + 697640.176 + 621325.373 = MXN3,095,947 Mil.
Cash Flow from Operations was 905.754 + 4854.827 + 80325.874 + 24901.222 = MXN110,988 Mil.
|
Total Receivables was MXN418,106 Mil.
Revenue was 854118.196 + 833399.267 + 837459.525 + 892117.465 = MXN3,417,094 Mil.
Gross Profit was 854118.196 + 833399.267 + 837459.525 + 892117.465 = MXN3,417,094 Mil.
Total Current Assets was MXN0 Mil.
Total Assets was MXN2,606,651 Mil.
Property, Plant and Equipment(Net PPE) was MXN68,352 Mil.
Depreciation, Depletion and Amortization(DDA) was MXN54,117 Mil.
Selling, General, & Admin. Expense(SGA) was MXN256,551 Mil.
Total Current Liabilities was MXN0 Mil.
Long-Term Debt & Capital Lease Obligation was MXN489,366 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) |
| = | (638024.791 / 4130719.876) | / | (418105.785 / 3417094.453) |
| = | 0.154458 | / | 0.122357 |
| | = | 1.2624 |
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) |
| = | (3417094.453 / 3417094.453) | / | (4130719.876 / 4130719.876) |
| = | 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 + 70766.938) / 3103959.204) | / | (1 - (0 + 68351.752) / 2606650.842) |
| = | 0.977201 | / | 0.973778 |
| | = | 1.0035 |
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 |
| = | 4130719.876 | / | 3417094.453 |
| | = | 1.2088 |
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)) |
| = | (54116.805 / (54116.805 + 68351.752)) | / | (51602.056 / (51602.056 + 70766.938)) |
| = | 0.441883 | / | 0.421692 |
| | = | 1.0479 |
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) |
| = | (268617.957 / 4130719.876) | / | (256551.449 / 3417094.453) |
| = | 0.065029 | / | 0.075079 |
| | = | 0.8661 |
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) |
| = | ((595237.769 + 0) / 3103959.204) | / | ((489366.492 + 0) / 2606650.842) |
| = | 0.191767 | / | 0.187738 |
| | = | 1.0215 |
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 |
| = | (55779.989 - 3095946.961 | - | 110987.677) | / | 3103959.204 |
| | = | -1.015205 |
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 Cigna Group has a M-score of -6.78 suggests that the company is unlikely to be a manipulator.
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