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Everest Group (STU:ERE) Beneish M-Score : -2.10 (As of Dec. 12, 2024)


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What is Everest Group Beneish M-Score?

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 -2.1 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

STU:ERE' s Beneish M-Score Range Over the Past 10 Years
Min: -4.09   Med: -2.53   Max: -2.05
Current: -2.1

During the past 13 years, the highest Beneish M-Score of Everest Group was -2.05. The lowest was -4.09. And the median was -2.53.


Everest 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 Everest 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 * 1.0228+0.528 * 1+0.404 * 1+0.892 * 1.1196+0.115 * 1
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0+4.679 * -0.041738-0.327 * 0.2865
=-2.14

* 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 €7,884 Mil.
Revenue was 3830.151 + 3839.557 + 3753.6 + 3332.378 = €14,756 Mil.
Gross Profit was 3830.151 + 3839.557 + 3753.6 + 3332.378 = €14,756 Mil.
Total Current Assets was €0 Mil.
Total Assets was €50,333 Mil.
Property, Plant and Equipment(Net PPE) was €0 Mil.
Depreciation, Depletion and Amortization(DDA) was €0 Mil.
Selling, General, & Admin. Expense(SGA) was €0 Mil.
Total Current Liabilities was €0 Mil.
Long-Term Debt & Capital Lease Obligation was €973 Mil.
Net Income was 458.609 + 672.596 + 674.36 + 737.268 = €2,543 Mil.
Non Operating Income was -91.902 + 21.367 + 28.52 + -68.775 = €-111 Mil.
Cash Flow from Operations was 1565.938 + 1242.073 + 1013.84 + 932.589 = €4,754 Mil.
Total Receivables was €6,885 Mil.
Revenue was 3684.284 + 3321.877 + 3083.134 + 3090.656 = €13,180 Mil.
Gross Profit was 3684.284 + 3321.877 + 3083.134 + 3090.656 = €13,180 Mil.
Total Current Assets was €0 Mil.
Total Assets was €43,400 Mil.
Property, Plant and Equipment(Net PPE) was €0 Mil.
Depreciation, Depletion and Amortization(DDA) was €0 Mil.
Selling, General, & Admin. Expense(SGA) was €33 Mil.
Total Current Liabilities was €0 Mil.
Long-Term Debt & Capital Lease Obligation was €2,929 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)
=(7883.75 / 14755.686) / (6885.076 / 13179.951)
=0.534286 / 0.52239
=1.0228

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)
=(13179.951 / 13179.951) / (14755.686 / 14755.686)
=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 + 0) / 50333.464) / (1 - (0 + 0) / 43399.966)
=1 / 1
=1

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
=14755.686 / 13179.951
=1.1196

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 + 0)) / (0 / (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)
=(0 / 14755.686) / (32.85 / 13179.951)
=0 / 0.002492
=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)
=((973.08 + 0) / 50333.464) / ((2929.062 + 0) / 43399.966)
=0.019333 / 0.06749
=0.2865

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
=(2542.833 - -110.79 - 4754.44) / 50333.464
=-0.041738

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.

Everest Group has a M-score of -2.14 suggests that the company is unlikely to be a manipulator.


Everest Group Beneish M-Score Related Terms

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Everest Group Business Description

Traded in Other Exchanges
Address
141 Front Street, Seon Place - 4th Floor, P.O. Box HM 845, Hamilton, BMU, HM 19
Everest Group Ltd is engaged in providing insurance services in the U.S., Bermuda, and international markets. It operates in Reinsurance and Insurance business. The Reinsurance operation writes property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers, and general agents within the U.S., Bermuda, Canada, Europe, and South America.