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Assurant Beneish M-Score

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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.

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

During the past 13 years, the highest Beneish M-Score of Assurant was 6.77. The lowest was -3.34. And the median was -2.54.


Assurant 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 Assurant 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

* 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 (Dec21) TTM:Last Year (Dec20) TTM:
Total Receivables was $8,121 Mil.
Revenue was $10,188 Mil.
Gross Profit was $10,188 Mil.
Total Current Assets was $17,625 Mil.
Total Assets was $33,912 Mil.
Property, Plant and Equipment(Net PPE) was $561 Mil.
Depreciation, Depletion and Amortization(DDA) was $172 Mil.
Selling, General, & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $5,742 Mil.
Long-Term Debt & Capital Lease Obligation was $2,203 Mil.
Net Income was $1,372 Mil.
Gross Profit was $0 Mil.
Cash Flow from Operations was $782 Mil.
Total Receivables was $8,154 Mil.
Revenue was $9,608 Mil.
Gross Profit was $9,608 Mil.
Total Current Assets was $17,469 Mil.
Total Assets was $44,650 Mil.
Property, Plant and Equipment(Net PPE) was $446 Mil.
Depreciation, Depletion and Amortization(DDA) was $142 Mil.
Selling, General, & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $5,309 Mil.
Long-Term Debt & Capital Lease Obligation was $2,253 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)
=(8121.4 / 10187.6) / (8154.3 / 9608.4)
=0.79718481 / 0.84866367
=

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)
=(9608.4 / 9608.4) / (10187.6 / 10187.6)
=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 - (17625.3 + 561.4) / 33911.5) / (1 - (17469.4 + 446.1) / 44649.9)
=0.4637011 / 0.5987561
=

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
=10187.6 / 9608.4
=

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))
=(142.3 / (142.3 + 446.1)) / (171.6 / (171.6 + 561.4))
=0.24184228 / 0.23410641
=

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 / 10187.6) / (0 / 9608.4)
=0 / 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)
=((2202.5 + 5741.5) / 33911.5) / ((2252.9 + 5309.2) / 44649.9)
=0.23425682 / 0.16936432
=

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
=(1372.4 - 0 - 781.7) / 33911.5
=0.0174

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.


Assurant Beneish M-Score Related Terms

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Assurant Business Description

Assurant logo
Traded in Other Exchanges
Address
55 Broadway, Suite 2901, New York, NY, USA, 10006
Assurant Inc offers a range of property-casualty, health, employee benefit, and warranty insurance to a client base made up of individuals and institutions. Its segments are Global Housing, Global Lifestyle, Corporate and Other. Global Housing segment, the key revenue-generating segment, provides lender-placed homeowners insurance, lender-placed manufactured housing insurance and lender-placed flood insurance; renters insurance and related products; and voluntary manufactured housing insurance, voluntary homeowners insurance and other specialty products. Global Lifestyle provides mobile device solutions and extended service products and related services for mobile devices, consumer electronics and appliances; vehicle protection; and credit protection and other insurance products.
Executives
Granat Sari Beth director C/O MARKIT LTD, 4TH FL, ROPEMAKER PLACE 25 ROPEMAKER STREET LONDON X0 EC2Y 9LY
Meier Keith officer: EVP, COO C/O ASSURANT, INC. 55 BROADWAY, SUITE 2901 NEW YORK NY 10006
Dirienzo Dimitry officer: SVP, CAO, Controller C/O ASSURANT, INC. 28 LIBERTY ST. 41 F. NEW YORK NY 10005
Rosenblum Jay officer: EVP and CLO C/O ASSURANT, INC. 28 LIBERTY ST, 41ST FL. NEW YORK NY 10005
Luthi Francesca officer: EVP, CAO 1180 NORTH TOWN CENTER DRIVE SUITE 100 LAS VEGAS NV 89144
Carter J Braxton Ii director C/O T-MOBILE US, INC. 12920 SE 38TH STREET BELLEVUE WA 98006
Alves Paget Leonard director SPRINT NEXTEL 6200 SPRINT PARKWAY KSOPHF0410 - 4A403 OVERLAND PARK KS 66251
Redzic Ognjen director C/O ASSURANT, INC. 28 LIBERTY STREET, 41ST FL. NEW YORK NY 10005
Schultz Tammy L. officer: EVP C/O ASSURANT, INC.,28 LIBERTY STREET 41ST FLOOR NEW YORK NY 10005
Lonergan Robert officer: EVP, other: Chief Strategy Officer C/O ASSURANT, INC.,28 LIBERTY STREET 41ST FLOOR NEW YORK NY 10005
Campbell Michael P. officer: EVP C/O ASSURANT, INC.,28 LIBERTY STREET 41ST FLOOR NEW YORK NY 10005
Demmings Keith officer: EVP C/O ASSURANT, INC.,28 LIBERTY STREET NEW YORK NY 10005
Mcgoohan Peter director 301 COMMERCE STREET,SUITE 3300 FORT WORTH TX 76102
Leathers Eric W director 54 THOMPSON ST NEW YORK NY 10012
Tpg Advisors Vi-aiv, Inc. 10 percent owner 301 COMMERCE STREET FORT WORTH TX 76102
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