Palestine Insurance Co (XPAE:PICO) Beneish M-Score : -2.32 (As of May. 14, 2024)

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What is Palestine 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 -2.32 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

XPAE:PICO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.49 Med: -3.16 Max: -2.32
Current: -2.32

During the past 13 years, the highest Beneish M-Score of Palestine Insurance Co was -2.32. The lowest was -3.49. And the median was -3.16.

Palestine 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 Palestine 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 * 1.3669

0.528 * 1

0.404 * 0.9958

0.892 * 0.9436

0.115 * 0.637

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.8179

4.679 * -0.032492

0.327 * 0.3595

-2.32

* 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 $0.50 Mil.
Revenue was 13.862 + 9.366 + 13.369 + 16.555 = $53.15 Mil.
Gross Profit was 13.862 + 9.366 + 13.369 + 16.555 = $53.15 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $66.57 Mil.
Property, Plant and Equipment(Net PPE) was $7.11 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.63 Mil.
Selling, General, & Admin. Expense(SGA) was $0.92 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $1.42 Mil.
Net Income was -0.593 + -0.362 + 0.292 + 1.056 = $0.39 Mil.
Non Operating Income was -0.261 + 0.004 + 0.133 + 0.135 = $0.01 Mil.
Cash Flow from Operations was 4.197 + 2.789 + -1.086 + -3.355 = $2.55 Mil.

Total Receivables was $0.39 Mil.
Revenue was 16.565 + 11.928 + 12.317 + 15.52 = $56.33 Mil.
Gross Profit was 16.565 + 11.928 + 12.317 + 15.52 = $56.33 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $63.87 Mil.
Property, Plant and Equipment(Net PPE) was $6.58 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.36 Mil.
Selling, General, & Admin. Expense(SGA) was $0.53 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $3.80 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)
	=	(0.503 / 53.152)	/	(0.39 / 56.33)
	=	0.009463	/	0.006923
	=	1.3669

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)
	=	(56.33 / 56.33)	/	(53.152 / 53.152)
	=	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 + 7.112) / 66.57)	/	(1 - (0 + 6.581) / 63.867)
	=	0.893165	/	0.896958
	=	0.9958

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
	=	53.152	/	56.33
	=	0.9436

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))
	=	(0.362 / (0.362 + 6.581))	/	(0.634 / (0.634 + 7.112))
	=	0.052139	/	0.081849
	=	0.637

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)
	=	(0.916 / 53.152)	/	(0.534 / 56.33)
	=	0.017234	/	0.00948
	=	1.8179

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)
	=	((1.423 + 0) / 66.57)	/	((3.798 + 0) / 63.867)
	=	0.021376	/	0.059467
	=	0.3595

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
	=	(0.393 - 0.011	-	2.545)	/	66.57
	=	-0.032492

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.

Palestine Insurance Co has a M-score of -2.32 suggests that the company is unlikely to be a manipulator.

Palestine Insurance Co Beneish M-Score Related Terms

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Palestine Insurance Co (XPAE:PICO) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Palestine Insurance Co (XPAE:PICO) » Definitions » Beneish M-Score

Comparable Companies

TSXV:ICPH CNFR BKK:TSI ISX:ASRM BKK:NSI BKK:BUI COL:PINS.N0000 UNAM FNHC NSEC

Traded in Other Exchanges

N/A

Address

Yafa Street, P.O.Box 281, Ramallah, PSE

Website

https://www.pic-pal.ps

Palestine Insurance Co is engaged in providing insurance, re-insurance, and all kinds of warranty work and compensations. It offers insurance including fire, property damage, marine, health, and motor.