Bangkok Union Insurance PCL 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 Bangkok Union Insurance PCL 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 * 1.028 | + | 0.528 * 1 | + | 0.404 * 0.9833 | + | 0.892 * 0.8987 | + | 0.115 * 1 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.2176 | + | 4.679 * -0.016427 | - | 0.327 * 1.1035 |
| = | -2.70 |
* 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 ฿135 Mil.
Revenue was 270.13 + 262.694 + 273.691 + 270.962 = ฿1,077 Mil.
Gross Profit was 270.13 + 262.694 + 273.691 + 270.962 = ฿1,077 Mil.
Total Current Assets was ฿0 Mil.
Total Assets was ฿1,880 Mil.
Property, Plant and Equipment(Net PPE) was ฿306 Mil.
Depreciation, Depletion and Amortization(DDA) was ฿0 Mil.
Selling, General, & Admin. Expense(SGA) was ฿129 Mil.
Total Current Liabilities was ฿0 Mil.
Long-Term Debt & Capital Lease Obligation was ฿51 Mil.
Net Income was 13.883 + 7.583 + 36.247 + 42.235 = ฿100 Mil.
Non Operating Income was 18.254 + 18.068 + 17.611 + 17.414 = ฿71 Mil.
Cash Flow from Operations was 22.114 + -7.671 + 38.736 + 6.299 = ฿59 Mil.
|
Total Receivables was ฿146 Mil.
Revenue was 267.502 + 300.88 + 321.877 + 308.687 = ฿1,199 Mil.
Gross Profit was 267.502 + 300.88 + 321.877 + 308.687 = ฿1,199 Mil.
Total Current Assets was ฿0 Mil.
Total Assets was ฿2,062 Mil.
Property, Plant and Equipment(Net PPE) was ฿306 Mil.
Depreciation, Depletion and Amortization(DDA) was ฿0 Mil.
Selling, General, & Admin. Expense(SGA) was ฿118 Mil.
Total Current Liabilities was ฿0 Mil.
Long-Term Debt & Capital Lease Obligation was ฿51 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) |
| = | (134.814 / 1077.477) | / | (145.921 / 1198.946) |
| = | 0.12512 | / | 0.121708 |
| | = | 1.028 |
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) |
| = | (1198.946 / 1198.946) | / | (1077.477 / 1077.477) |
| = | 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 + 306.099) / 1879.667) | / | (1 - (0 + 306.483) / 2062.121) |
| = | 0.837153 | / | 0.851375 |
| | = | 0.9833 |
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 |
| = | 1077.477 | / | 1198.946 |
| | = | 0.8987 |
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 + 306.483)) | / | (0 / (0 + 306.099)) |
| = | 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) |
| = | (128.816 / 1077.477) | / | (117.725 / 1198.946) |
| = | 0.119553 | / | 0.09819 |
| | = | 1.2176 |
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) |
| = | ((51.363 + 0) / 1879.667) | / | ((51.065 + 0) / 2062.121) |
| = | 0.027326 | / | 0.024763 |
| | = | 1.1035 |
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 |
| = | (99.948 - 71.347 | - | 59.478) | / | 1879.667 |
| | = | -0.016427 |
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.
Bangkok Union Insurance PCL has a M-score of -2.70 suggests that the company is unlikely to be a manipulator.
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