Shinkong Insurance 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 Shinkong Insurance 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 * 1.2761 | + | 0.528 * 1 | + | 0.404 * 1.0022 | + | 0.892 * 1.0817 | + | 0.115 * 1.0175 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9259 | + | 4.679 * -0.00649 | - | 0.327 * 0.6834 |
| = | -2.06 |
* 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 (Mar24) TTM: | Last Year (Mar23) TTM: |
Total Receivables was NT$2,524 Mil.
Revenue was 5255.404 + 4907.811 + 5276.9 + 5059.244 = NT$20,499 Mil.
Gross Profit was 5255.404 + 4907.811 + 5276.9 + 5059.244 = NT$20,499 Mil.
Total Current Assets was NT$0 Mil.
Total Assets was NT$48,745 Mil.
Property, Plant and Equipment(Net PPE) was NT$1,173 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$102 Mil.
Selling, General, & Admin. Expense(SGA) was NT$3,728 Mil.
Total Current Liabilities was NT$0 Mil.
Long-Term Debt & Capital Lease Obligation was NT$23 Mil.
Net Income was 879.511 + 747.477 + 995.642 + 717.99 = NT$3,341 Mil.
Non Operating Income was 233.805 + -210.041 + 214.234 + 141.568 = NT$380 Mil.
Cash Flow from Operations was 2181.077 + 126.259 + -398.531 + 1368.591 = NT$3,277 Mil.
|
Total Receivables was NT$1,829 Mil.
Revenue was 4694.714 + 4808.381 + 4872.712 + 4575.341 = NT$18,951 Mil.
Gross Profit was 4694.714 + 4808.381 + 4872.712 + 4575.341 = NT$18,951 Mil.
Total Current Assets was NT$0 Mil.
Total Assets was NT$45,059 Mil.
Property, Plant and Equipment(Net PPE) was NT$1,179 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$105 Mil.
Selling, General, & Admin. Expense(SGA) was NT$3,723 Mil.
Total Current Liabilities was NT$0 Mil.
Long-Term Debt & Capital Lease Obligation was NT$31 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) |
| = | (2524.451 / 20499.359) | / | (1828.91 / 18951.148) |
| = | 0.123148 | / | 0.096507 |
| | = | 1.2761 |
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) |
| = | (18951.148 / 18951.148) | / | (20499.359 / 20499.359) |
| = | 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 + 1173.1) / 48744.59) | / | (1 - (0 + 1178.861) / 45058.682) |
| = | 0.975934 | / | 0.973837 |
| | = | 1.0022 |
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 |
| = | 20499.359 | / | 18951.148 |
| | = | 1.0817 |
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)) |
| = | (104.622 / (104.622 + 1178.861)) | / | (102.166 / (102.166 + 1173.1)) |
| = | 0.081514 | / | 0.080113 |
| | = | 1.0175 |
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) |
| = | (3728.395 / 20499.359) | / | (3722.599 / 18951.148) |
| = | 0.181879 | / | 0.196431 |
| | = | 0.9259 |
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) |
| = | ((22.607 + 0) / 48744.59) | / | ((30.593 + 0) / 45058.682) |
| = | 0.000464 | / | 0.000679 |
| | = | 0.6834 |
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 |
| = | (3340.62 - 379.566 | - | 3277.396) | / | 48744.59 |
| | = | -0.00649 |
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.
Shinkong Insurance Co has a M-score of -2.06 suggests that the company is unlikely to be a manipulator.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
TPE:2850 has been successfully added to your