PT Lippo General Insurance Tbk 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 PT Lippo General Insurance Tbk 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 * 0.5072 | + | 0.528 * 1 | + | 0.404 * 0.9985 | + | 0.892 * 1.4118 | + | 0.115 * 1.1374 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 1.0028 | + | 4.679 * 0.013825 | - | 0.327 * 16.5952 |
| = | -7.59 |
* 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 Rp461,098 Mil.
Revenue was 684383.133 + 685680.936 + 773690.389 + 1006557.474 = Rp3,150,312 Mil.
Gross Profit was 684383.133 + 685680.936 + 773690.389 + 1006557.474 = Rp3,150,312 Mil.
Total Current Assets was Rp0 Mil.
Total Assets was Rp2,769,428 Mil.
Property, Plant and Equipment(Net PPE) was Rp50,960 Mil.
Depreciation, Depletion and Amortization(DDA) was Rp11,641 Mil.
Selling, General, & Admin. Expense(SGA) was Rp61,501 Mil.
Total Current Liabilities was Rp0 Mil.
Long-Term Debt & Capital Lease Obligation was Rp1,931 Mil.
Net Income was 1834.646 + -2423.768 + 4074.245 + 21400.205 = Rp24,885 Mil.
Non Operating Income was -833.017 + 6896.507 + -764.099 + -9528.208 = Rp-4,229 Mil.
Cash Flow from Operations was -209501.857 + -89307.05 + 102818.966 + 186817.421 = Rp-9,173 Mil.
|
Total Receivables was Rp643,942 Mil.
Revenue was 611126.323 + 677436.583 + 487272.09 + 455553.806 = Rp2,231,389 Mil.
Gross Profit was 611126.323 + 677436.583 + 487272.09 + 455553.806 = Rp2,231,389 Mil.
Total Current Assets was Rp0 Mil.
Total Assets was Rp3,035,236 Mil.
Property, Plant and Equipment(Net PPE) was Rp51,285 Mil.
Depreciation, Depletion and Amortization(DDA) was Rp13,756 Mil.
Selling, General, & Admin. Expense(SGA) was Rp43,438 Mil.
Total Current Liabilities was Rp0 Mil.
Long-Term Debt & Capital Lease Obligation was Rp128 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) |
| = | (461098.234 / 3150311.932) | / | (643941.818 / 2231388.802) |
| = | 0.146366 | / | 0.288583 |
| | = | 0.5072 |
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) |
| = | (2231388.802 / 2231388.802) | / | (3150311.932 / 3150311.932) |
| = | 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 + 50959.553) / 2769428.114) | / | (1 - (0 + 51284.668) / 3035235.615) |
| = | 0.981599 | / | 0.983104 |
| | = | 0.9985 |
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 |
| = | 3150311.932 | / | 2231388.802 |
| | = | 1.4118 |
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)) |
| = | (13756.01 / (13756.01 + 51284.668)) | / | (11640.945 / (11640.945 + 50959.553)) |
| = | 0.211499 | / | 0.185956 |
| | = | 1.1374 |
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) |
| = | (61501.134 / 3150311.932) | / | (43437.886 / 2231388.802) |
| = | 0.019522 | / | 0.019467 |
| | = | 1.0028 |
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) |
| = | ((1930.602 + 0) / 2769428.114) | / | ((127.564 + 0) / 3035235.615) |
| = | 0.000697 | / | 4.2E-5 |
| | = | 16.5952 |
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 |
| = | (24885.328 - -4228.817 | - | -9172.52) | / | 2769428.114 |
| | = | 0.013825 |
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.
PT Lippo General Insurance Tbk has a M-score of -7.59 suggests that the company is unlikely to be a manipulator.
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