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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 -2.63 no higher than -1.78, which implies that the company is unlikely to be a manipulator.
The historical rank and industry rank for Markel Group's Beneish M-Score or its related term are showing as below:
During the past 13 years, the highest Beneish M-Score of Markel Group was -1.78. The lowest was -2.89. And the median was -2.69.
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 Markel 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 * 0.8363 | + | 0.528 * 1 | + | 0.404 * 1.4744 | + | 0.892 * 1.3302 | + | 0.115 * 1 | |
- | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI | |||||||
- | 0.172 * 1 | + | 4.679 * -0.109733 | - | 0.327 * 0.9129 | |||||||
= | -2.63 |
* 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 $12,691 Mil. Revenue was $15,714 Mil. Gross Profit was $15,714 Mil. Total Current Assets was $22,903 Mil. Total Assets was $55,046 Mil. Property, Plant and Equipment(Net PPE) was $0 Mil. Depreciation, Depletion and Amortization(DDA) was $260 Mil. Selling, General, & Admin. Expense(SGA) was $0 Mil. Total Current Liabilities was $1,038 Mil. Long-Term Debt & Capital Lease Obligation was $3,780 Mil. Net Income was $1,996 Mil. Gross Profit was $5,250 Mil. Cash Flow from Operations was $2,787 Mil. |
Total Receivables was $11,408 Mil. Revenue was $11,813 Mil. Gross Profit was $11,813 Mil. Total Current Assets was $30,071 Mil. Total Assets was $49,791 Mil. Property, Plant and Equipment(Net PPE) was $0 Mil. Depreciation, Depletion and Amortization(DDA) was $367 Mil. Selling, General, & Admin. Expense(SGA) was $0 Mil. Total Current Liabilities was $920 Mil. Long-Term Debt & Capital Lease Obligation was $3,854 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) |
= | (12690.807 / 15713.585) | / | (11407.801 / 11813.167) | |
= | 0.807633 | / | 0.965685 | |
= | 0.8363 |
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) | |
= | (11813.167 / 11813.167) | / | (15713.585 / 15713.585) | |
= | 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 - (22902.673 + 0) / 55045.71) | / | (1 - (30071.33 + 0) / 49791.259) | |
= | 0.583934 | / | 0.396052 | |
= | 1.4744 |
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 | |
= | 15713.585 | / | 11813.167 | |
= | 1.3302 |
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)) |
= | (366.954 / (366.954 + 0)) | / | (259.924 / (259.924 + 0)) | |
= | 1 | / | 1 | |
= | 1 |
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 / 15713.585) | / | (0 / 11813.167) | |
= | 0 | / | 0 | |
= | 1 |
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) |
= | ((3779.796 + 1037.722) / 55045.71) | / | ((3853.689 + 919.682) / 49791.259) | |
= | 0.087519 | / | 0.095868 | |
= | 0.9129 |
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 | |
= | (1996.06 - 5249.565 | - | 2786.807) | / | 55045.71 | |
= | -0.109733 |
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.
Markel Group has a M-score of -2.63 suggests that the company is unlikely to be a manipulator.
Thank you for viewing the detailed overview of Markel Group's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Lawrence A Cunningham | director | 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060 |
Mark Besca | director | 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060 |
A. Lynne Puckett | director | C/O 222 W LAS COLINAS BLVD, SUITE 900N, IRVING TX 75039 |
Thomas Sinnickson Gayner | officer: Pres. & Chief Investment Off. | C/O MARKEL CORP, 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060 |
Steven A Markel | director, officer: Vice Chairman | |
Greta J Harris | director | 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060 |
Morgan E. Housel | director | 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060 |
Teresa S Gendron | officer: Chief Financial Officer | 520 MADISON AVE., C/O JEFFERIES FINANCIAL GROUP INC., NEW YORK NY 10022 |
Diane Leopold | director | 120 TREDEGAR STREET, RICHMOND VA 23219 |
Anthony F Markel | director, officer: Vice Chairman | 4551 COX RD, GLEN ALLEN VA 23060 |
Andrew G. Crowley | officer: President, Markel Ventures | 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060 |
Whitt Richard R Iii | officer: President & Co-COO | C/O MARKEL CORPORATION, 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060 |
Brian J. Costanzo | officer: CAO and Controller | 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060 |
Stewart M Kasen | director | 5818 EL CAMINO REAL, CARLSBAD CA 92008 |
Susan L. Davies | officer: CHRO, Markel Insurance | MARKEL CORPORATION, 4521 HIGHWOODS PARKWAY, GLEN ALLEN VA 23060 |
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