American Independence 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 American Independence 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 * 1.0144 | + | 0.528 * 1 | + | 0.404 * 1.0499 | + | 0.892 * 0.9362 | + | 0.115 * 1 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.1465 | + | 4.679 * 0.364974 | - | 0.327 * 0.6024 |
| = | -0.69 |
* 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.
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) |
| = | (16.391 / 152.947) | / | (17.259 / 163.364) |
| = | 0.107168 | / | 0.105648 |
| | = | 1.0144 |
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) |
| = | (163.364 / 163.364) | / | (152.947 / 152.947) |
| = | 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 - (24.215 + 0) / 321.086) | / | (1 - (21.766 + 0) / 182.365) |
| = | 0.924584 | / | 0.880646 |
| | = | 1.0499 |
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 |
| = | 152.947 | / | 163.364 |
| | = | 0.9362 |
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)) |
| = | (1.162 / (1.162 + 0)) | / | (1.856 / (1.856 + 0)) |
| = | 1 | / | 1 |
| | = | 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) |
| = | (66.963 / 152.947) | / | (62.384 / 163.364) |
| = | 0.437818 | / | 0.381871 |
| | = | 1.1465 |
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) |
| = | ((2.025 + 45.382) / 321.086) | / | ((3.326 + 41.368) / 182.365) |
| = | 0.147646 | / | 0.24508 |
| | = | 0.6024 |
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 |
| = | (117.45 - 0 | - | 0.262) | / | 321.086 |
| | = | 0.364974 |
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.
American Independence has a M-score of -0.69 signals that the company is likely to be a manipulator.
American Independence (American Independence) Business Description
Traded in Other Exchanges
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Address
American Independence Corp is a Delaware corporation. The Company is an insurance holding Company, which provides specialized health coverage and related services to commercial customers and individuals. The Company focuses on niche health products and/or narrowly defined distribution channels in the United States. It's wholly owned subsidiary, Independence American Insurance Company, markets its products through IHC Risk Solutions, LLC, IHC Specialty Benefits, Inc., and IPA Family, LLC, which are subsidiaries of AMIC, and through independent brokers, producers and agents. Independence American is licensed to write property and/or casualty insurance in all 50 states and the District of Columbia, and has an A- (Excellent) rating from A.M. Best Company, Inc. Risk Solutions is a full-service direct writer of medical stop-loss insurance for self-insured employer groups. Risk Solutions has offices near Hartford, Connecticut and Philadelphia, Pennsylvania, and markets and underwrites employer medical stop-loss and group life mainly for Standard Security Life Insurance Company of New York. It also writes, to a much lesser extent, for three other carriers, including Madison National Life Insurance Company, Inc. and Independence American. Independence Holding Company and its subsidiaries including, among others, Standard Security Life and Madison National Life are collectively referred to as "IHC". Independence American writes group important medical, medical stop-loss, crucial medical plans for individuals and families, short-term medical, and dental, and began writing pet insurance in 2012.Independence American competes with many larger insurance and reinsurance companies and managed care organizations. Risk Solutions competes with many other managing general underwriters, insurance companies, and MCOs. AMIC is an insurance holding company; as such, AMIC and its subsidiaries are subject to regulation and supervision by multiple state insurance regulators, including the Office of the Insurance Commissioner of the State of Delaware.
Executives
| Teresa A Herbert |
director, officer: CFO & SVP |
96 CUMMINGS POINT RD, STAMFORD CT 06902 |
| Ronald I Simon |
director |
485 MADISON AVENUE, 14TH FLOOR, NEW YORK NY 10022 |
| Thung Roy T K |
director, officer: CEO |
96 CUMMINGS POINT RD STAMFORD CT 06902 |
| James G Tatum |
director |
96 CUMMINGS POINT RD STAMFORD CT 06902 |
| David T Kettig |
director, officer: President |
96 CUMMINGS POINT RD STAMFORD CT 06902 |
| Steven B Lapin |
director |
96 CUMMINGS POINT RD STAMFORD CT 06902 |
| Brian Schlier |
officer: Corporate Vice President - Tax |
96 CUMMINGS POINT RD STAMFORD CT 06902 |
| Gary Balzofiore |
officer: Corporate Vice President |
485 MADISON AVENUE, NEW YORK NY 10022 |
| Jeffrey C Smedsrud |
officer: Senior Vice President |
8009 34TH AVENUE SOUTH #360 BLOOMINGTON MN 55420 |
| Erickson Bernon Reneld Jr |
officer: Chief Health Actuary and SVP |
INDEPENDENCE HOLDING COMPANY 485 MADISON AVENUE, 14TH FLOOR NEW YORK NY 10022 |
| Scott Michael Wood |
officer: Senior Vice President |
2101 W. PEORIA AVE, SUITE 100 PHOENIX AZ 85029 |
| Paul R Janerico |
officer: VP - Internal Audit |
96 CUMMINGS POINT RD STAMFORD CT 06902 |
| Henry B Spencer |
officer: VP - Investments |
96 CUMMINGS POINT ROAD STAMFORD CT 06902 |
| Roy L Standfest |
officer: V.P.& Chief Investment Officer |
96 CUMMINGS POINT RD STAMFORD CT 06902 |
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