China Pacific Insurance (Group) Co 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 China Pacific Insurance (Group) Co 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 | + | 0.528 * 1 | + | 0.404 * 1.0015 | + | 0.892 * 1.1118 | + | 0.115 * 1 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * -3.92 | + | 4.679 * -0.039155 | - | 0.327 * 0.804 |
| = | -1.65 |
* 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 €0 Mil.
Revenue was 9856.804 + 10920.614 + 9885.327 + 9373.742 = €40,036 Mil.
Gross Profit was 9856.804 + 10920.614 + 9885.327 + 9373.742 = €40,036 Mil.
Total Current Assets was €0 Mil.
Total Assets was €371,851 Mil.
Property, Plant and Equipment(Net PPE) was €3,366 Mil.
Depreciation, Depletion and Amortization(DDA) was €0 Mil.
Selling, General, & Admin. Expense(SGA) was €-2,415 Mil.
Total Current Liabilities was €0 Mil.
Long-Term Debt & Capital Lease Obligation was €1,706 Mil.
Net Income was 872.272 + 1677.979 + 1712.478 + 1502.226 = €5,765 Mil.
Non Operating Income was 176.684 + 82.638 + 138.299 + 118.425 = €516 Mil.
Cash Flow from Operations was 3365.395 + 4943.276 + 5127.063 + 6373.122 = €19,809 Mil.
|
Total Receivables was €0 Mil.
Revenue was 7644.535 + 9259.71 + 9229.484 + 9875.387 = €36,009 Mil.
Gross Profit was 7644.535 + 9259.71 + 9229.484 + 9875.387 = €36,009 Mil.
Total Current Assets was €0 Mil.
Total Assets was €301,030 Mil.
Property, Plant and Equipment(Net PPE) was €3,178 Mil.
Depreciation, Depletion and Amortization(DDA) was €0 Mil.
Selling, General, & Admin. Expense(SGA) was €554 Mil.
Total Current Liabilities was €0 Mil.
Long-Term Debt & Capital Lease Obligation was €1,718 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) |
| = | (0 / 40036.487) | / | (0 / 36009.116) |
| = | 0 | / | 0 |
| | = | 1 |
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) |
| = | (36009.116 / 36009.116) | / | (40036.487 / 40036.487) |
| = | 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 + 3366.445) / 371851.084) | / | (1 - (0 + 3178.459) / 301029.825) |
| = | 0.990947 | / | 0.989441 |
| | = | 1.0015 |
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 |
| = | 40036.487 | / | 36009.116 |
| | = | 1.1118 |
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)) |
| = | (0 / (0 + 3178.459)) | / | (0 / (0 + 3366.445)) |
| = | 0 | / | 0 |
| | = | 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) |
| = | (-2414.728 / 40036.487) | / | (554.023 / 36009.116) |
| = | -0.060313 | / | 0.015386 |
| | = | -3.92 |
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) |
| = | ((1706.243 + 0) / 371851.084) | / | ((1718.364 + 0) / 301029.825) |
| = | 0.004589 | / | 0.005708 |
| | = | 0.804 |
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 |
| = | (5764.955 - 516.046 | - | 19808.856) | / | 371851.084 |
| | = | -0.039155 |
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.
China Pacific Insurance (Group) Co has a M-score of -1.65 signals that the company is likely to be a manipulator.
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