First Insurance Co (TPE:2852) Beneish M-Score : -1.98 (As of Dec. 12, 2024)

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What is First Insurance Co 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 -1.98 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

TPE:2852' s Beneish M-Score Range Over the Past 10 Years
Min: -2.82 Med: -2.44 Max: -1.8
Current: -1.98

During the past 13 years, the highest Beneish M-Score of First Insurance Co was -1.80. The lowest was -2.82. And the median was -2.44.

First 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 First Insurance Co for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.1838

0.528 * 1

0.404 * 1.0024

0.892 * 1.0781

0.115 * 1.111

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9611

4.679 * 0.012502

0.327 * 0.4491

-1.98

* 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 NT$1,043 Mil.
Revenue was 1929.552 + 2029.587 + 1912.978 + 1878.181 = NT$7,750 Mil.
Gross Profit was 1929.552 + 2029.587 + 1912.978 + 1878.181 = NT$7,750 Mil.
Total Current Assets was NT$0 Mil.
Total Assets was NT$20,206 Mil.
Property, Plant and Equipment(Net PPE) was NT$620 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$45 Mil.
Selling, General, & Admin. Expense(SGA) was NT$1,568 Mil.
Total Current Liabilities was NT$0 Mil.
Long-Term Debt & Capital Lease Obligation was NT$3 Mil.
Net Income was 248.472 + 275.047 + 254.74 + 130.825 = NT$909 Mil.
Non Operating Income was 5.325 + 20.229 + 32.004 + 1.215 = NT$59 Mil.
Cash Flow from Operations was 640.28 + -96.005 + 262.348 + -208.927 = NT$598 Mil.

Total Receivables was NT$817 Mil.
Revenue was 1888.67 + 1904.541 + 1723.211 + 1672.729 = NT$7,189 Mil.
Gross Profit was 1888.67 + 1904.541 + 1723.211 + 1672.729 = NT$7,189 Mil.
Total Current Assets was NT$0 Mil.
Total Assets was NT$19,292 Mil.
Property, Plant and Equipment(Net PPE) was NT$636 Mil.
Depreciation, Depletion and Amortization(DDA) was NT$52 Mil.
Selling, General, & Admin. Expense(SGA) was NT$1,513 Mil.
Total Current Liabilities was NT$0 Mil.
Long-Term Debt & Capital Lease Obligation was NT$5 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)
	=	(1042.625 / 7750.298)	/	(816.988 / 7189.151)
	=	0.134527	/	0.113642
	=	1.1838

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)
	=	(7189.151 / 7189.151)	/	(7750.298 / 7750.298)
	=	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 + 620.157) / 20206.498)	/	(1 - (0 + 636.3) / 19291.98)
	=	0.969309	/	0.967017
	=	1.0024

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
	=	7750.298	/	7189.151
	=	1.0781

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))
	=	(51.642 / (51.642 + 636.3))	/	(44.937 / (44.937 + 620.157))
	=	0.075067	/	0.067565
	=	1.111

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)
	=	(1567.891 / 7750.298)	/	(1513.204 / 7189.151)
	=	0.202301	/	0.210484
	=	0.9611

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)
	=	((2.594 + 0) / 20206.498)	/	((5.498 + 0) / 19291.98)
	=	0.000128	/	0.000285
	=	0.4491

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
	=	(909.084 - 58.773	-	597.696)	/	20206.498
	=	0.012502

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.

First Insurance Co has a M-score of -1.98 suggests that the company is unlikely to be a manipulator.

First Insurance Co Beneish M-Score Related Terms

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First Insurance Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » First Insurance Co Ltd (TPE:2852) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 54, Zhongxiao East Road, 11th Floor, Section 1, Taipei, TWN, 100

Website

https://www.firstins.com.tw

First Insurance Co Ltd is engaged in the provision of insurance services. The company offers various insurance services such as fire, liability, and professional insurance such as medical malpractice insurance, hospital comprehensive liability insurance, directors, and officer's liability insurance, personal accident, motor, and marine transportation insurance, machinery and engineering insurance, and others. Additionally, it also renders reinsurance services. The Company has branches in Taichung, Kaohsiung, Tainan, Taoyuan, and New Taipei City.