# Safety Insurance Group (Safety Insurance Group) Beneish M-Score

: -1.90 (As of Today)
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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 -1.9 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

SAFT' s Beneish M-Score Range Over the Past 10 Years
Min: -2.61   Med: -2.46   Max: -1.9
Current: -1.9

During the past 13 years, the highest Beneish M-Score of Safety Insurance Group was -1.90. The lowest was -2.61. And the median was -2.46.

## Safety Insurance 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 Safety Insurance 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 * 1.0837 + 0.528 * 1 + 0.404 * 1.9688 + 0.892 * 1.1795 + 0.115 * 0.7603 - 0.172 * SGAI + 4.679 * TATA - 0.327 * LVGI - 0.172 * 1 + 4.679 * -0.015873 - 0.327 * 0.846 = -1.90

* 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 \$383.2 Mil. Revenue was \$925.9 Mil. Gross Profit was \$925.9 Mil. Total Current Assets was \$900.8 Mil. Total Assets was \$2,094.0 Mil. Property, Plant and Equipment(Net PPE) was \$31.5 Mil. Depreciation, Depletion and Amortization(DDA) was \$6.9 Mil. Selling, General, & Admin. Expense(SGA) was \$0.0 Mil. Total Current Liabilities was \$112.0 Mil. Long-Term Debt & Capital Lease Obligation was \$19.8 Mil. Net Income was \$18.9 Mil. Gross Profit was \$0.0 Mil. Cash Flow from Operations was \$52.1 Mil. Total Receivables was \$299.8 Mil. Revenue was \$785.1 Mil. Gross Profit was \$785.1 Mil. Total Current Assets was \$1,375.3 Mil. Total Assets was \$1,972.6 Mil. Property, Plant and Equipment(Net PPE) was \$41.5 Mil. Depreciation, Depletion and Amortization(DDA) was \$6.6 Mil. Selling, General, & Admin. Expense(SGA) was \$0.0 Mil. Total Current Liabilities was \$123.4 Mil. Long-Term Debt & Capital Lease Obligation was \$23.3 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) = (383.186 / 925.946) / (299.801 / 785.061) = 0.413832 / 0.381882 = 1.0837

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) = (785.061 / 785.061) / (925.946 / 925.946) = 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 - (900.806 + 31.476) / 2094.004) / (1 - (1375.256 + 41.464) / 1972.569) = 0.554785 / 0.281789 = 1.9688

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 = 925.946 / 785.061 = 1.1795

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)) = (6.61 / (6.61 + 41.464)) / (6.949 / (6.949 + 31.476)) = 0.137496 / 0.180846 = 0.7603

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 / 925.946) / (0 / 785.061) = 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) = ((19.756 + 112.039) / 2094.004) / ((23.336 + 123.407) / 1972.569) = 0.062939 / 0.074392 = 0.846

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 = (18.875 - 0 - 52.114) / 2094.004 = -0.015873

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.

Safety Insurance Group has a M-score of -1.90 suggests that the company is unlikely to be a manipulator.

## Safety Insurance Group Beneish M-Score Related Terms

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## Safety Insurance Group (Safety Insurance Group) Business Description

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