Wiz Co Participacoes e Corretagem de Seguros 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 Wiz Co Participacoes e Corretagem de Seguros 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 * 0.9359 | + | 0.528 * 1 | + | 0.404 * 1.0006 | + | 0.892 * 1.2537 | + | 0.115 * 0.9739 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.8591 | + | 4.679 * -0.176254 | - | 0.327 * 0.929 |
| = | -3.09 |
* 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 R$227 Mil.
Revenue was 359.161 + 301.21 + 258.99 + 275.573 = R$1,195 Mil.
Gross Profit was 359.161 + 301.21 + 258.99 + 275.573 = R$1,195 Mil.
Total Current Assets was R$0 Mil.
Total Assets was R$2,544 Mil.
Property, Plant and Equipment(Net PPE) was R$20 Mil.
Depreciation, Depletion and Amortization(DDA) was R$122 Mil.
Selling, General, & Admin. Expense(SGA) was R$82 Mil.
Total Current Liabilities was R$0 Mil.
Long-Term Debt & Capital Lease Obligation was R$335 Mil.
Net Income was 58.167 + 44.506 + 24.947 + 13.962 = R$142 Mil.
Non Operating Income was 35.548 + 70.049 + 56.773 + 51.712 = R$214 Mil.
Cash Flow from Operations was 118.118 + 103.975 + 113.684 + 40.088 = R$376 Mil.
|
Total Receivables was R$193 Mil.
Revenue was 251.637 + 239.346 + 253.063 + 209.046 = R$953 Mil.
Gross Profit was 251.637 + 239.346 + 253.063 + 209.046 = R$953 Mil.
Total Current Assets was R$0 Mil.
Total Assets was R$2,578 Mil.
Property, Plant and Equipment(Net PPE) was R$22 Mil.
Depreciation, Depletion and Amortization(DDA) was R$112 Mil.
Selling, General, & Admin. Expense(SGA) was R$76 Mil.
Total Current Liabilities was R$0 Mil.
Long-Term Debt & Capital Lease Obligation was R$366 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) |
| = | (226.635 / 1194.934) | / | (193.145 / 953.092) |
| = | 0.189663 | / | 0.202651 |
| | = | 0.9359 |
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) |
| = | (953.092 / 953.092) | / | (1194.934 / 1194.934) |
| = | 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 + 20.342) / 2543.864) | / | (1 - (0 + 22.262) / 2577.821) |
| = | 0.992004 | / | 0.991364 |
| | = | 1.0006 |
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 |
| = | 1194.934 | / | 953.092 |
| | = | 1.2537 |
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)) |
| = | (112.087 / (112.087 + 22.262)) | / | (121.581 / (121.581 + 20.342)) |
| = | 0.834297 | / | 0.856669 |
| | = | 0.9739 |
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) |
| = | (82.098 / 1194.934) | / | (76.225 / 953.092) |
| = | 0.068705 | / | 0.079977 |
| | = | 0.8591 |
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) |
| = | ((335.137 + 0) / 2543.864) | / | ((365.584 + 0) / 2577.821) |
| = | 0.131743 | / | 0.141819 |
| | = | 0.929 |
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 |
| = | (141.582 - 214.082 | - | 375.865) | / | 2543.864 |
| | = | -0.176254 |
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.
Wiz Co Participacoes e Corretagem de Seguros has a M-score of -3.09 suggests that the company is unlikely to be a manipulator.
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