Al Mashriq Insurance Co (XPAE:MIC) Beneish M-Score : -3.10 (As of Nov. 13, 2024)

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What is Al Mashriq 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 -3.1 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

XPAE:MIC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.83 Med: -2.7 Max: -0.91
Current: -3.1

During the past 13 years, the highest Beneish M-Score of Al Mashriq Insurance Co was -0.91. The lowest was -3.83. And the median was -2.70.

Al Mashriq 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 Al Mashriq 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 * 0.8981

0.528 * 1

0.404 * 0.9957

0.892 * 0.8924

0.115 * 0.7803

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.1061

4.679 * -0.112179

0.327 * 0.558

-3.10

* 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 (Jun24) TTM:

Last Year (Jun23) TTM:

Total Receivables was $8.18 Mil.
Revenue was 9.654 + 9.693 + 8.938 + 11.985 = $40.27 Mil.
Gross Profit was 9.654 + 9.693 + 8.938 + 11.985 = $40.27 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $48.40 Mil.
Property, Plant and Equipment(Net PPE) was $5.05 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.57 Mil.
Selling, General, & Admin. Expense(SGA) was $1.60 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $1.84 Mil.
Net Income was 0.411 + 0.334 + 0.881 + -0.298 = $1.33 Mil.
Non Operating Income was 0.633 + 0.368 + 0.564 + 0.938 = $2.50 Mil.
Cash Flow from Operations was 1.071 + -1.503 + 1.974 + 2.712 = $4.25 Mil.

Total Receivables was $10.20 Mil.
Revenue was 10.616 + 10.246 + 12.318 + 11.945 = $45.13 Mil.
Gross Profit was 10.616 + 10.246 + 12.318 + 11.945 = $45.13 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $52.78 Mil.
Property, Plant and Equipment(Net PPE) was $5.30 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.45 Mil.
Selling, General, & Admin. Expense(SGA) was $1.63 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $3.59 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)
	=	(8.177 / 40.27)	/	(10.203 / 45.125)
	=	0.203054	/	0.226105
	=	0.8981

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)
	=	(45.125 / 45.125)	/	(40.27 / 40.27)
	=	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 + 5.047) / 48.396)	/	(1 - (0 + 5.298) / 52.781)
	=	0.895715	/	0.899623
	=	0.9957

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
	=	40.27	/	45.125
	=	0.8924

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))
	=	(0.454 / (0.454 + 5.298))	/	(0.568 / (0.568 + 5.047))
	=	0.078929	/	0.101158
	=	0.7803

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)
	=	(1.604 / 40.27)	/	(1.625 / 45.125)
	=	0.039831	/	0.036011
	=	1.1061

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)
	=	((1.839 + 0) / 48.396)	/	((3.594 + 0) / 52.781)
	=	0.037999	/	0.068093
	=	0.558

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
	=	(1.328 - 2.503	-	4.254)	/	48.396
	=	-0.112179

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.

Al Mashriq Insurance Co has a M-score of -3.10 suggests that the company is unlikely to be a manipulator.

Al Mashriq Insurance Co Beneish M-Score Related Terms

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Al Mashriq Insurance Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Al Mashriq Insurance Co (XPAE:MIC) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

P.O. Box 1600, Ramallah, PSE

Website

https://www.mashreqins.com

Al Mashriq Insurance Co is engaged in the provision of insurance, re-insurance related services. Its products are Engineering Insurance, General Accident Insurance, Personal Insurance, Marine Insurance, Fire Insurance, Vehicle Insurance, Propety Insurance, Civil Liability Insurance and Travel Insurance.