CNA Financial Beneish M Score

CNA
 Stock
  

USD 42.58  0.12  0.28%   

This module uses fundamental data of CNA Financial to approximate the value of its Beneish M Score. CNA Financial M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Continue to CNA Financial Piotroski F Score and CNA Financial Altman Z Score analysis.
  
CNA Financial Total Debt is projected to increase significantly based on the last few years of reporting. The past year's Total Debt was at 2.78 Billion. The current year Issuance Repayment of Debt Securities is expected to grow to about 94.3 M, whereas Long Term Debt is forecasted to decline to about 2.6 B. CNA Financial Calculated Tax Rate is projected to drop based on the last few years of reporting. The past year's Calculated Tax Rate was at 19.00. The current year Cash and Equivalents Turnover is expected to grow to 25.59, whereas PPandE Turnover is forecasted to decline to 40.01.
At this time, it appears that CNA Financial is an unlikely manipulator. The earnings manipulation may begin if CNA Financial's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by CNA Financial executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of CNA Financial's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.83
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables1.01Focus
Asset QualityN/AFocus
Expense CoverageN/AFocus
Gross Margin Strengs0.99Focus
Accruals FactorN/AFocus
Depreciation Resistance0.95Focus
Net Sales Growth0.88Focus
Financial Leverage Condition1.0Focus

CNA Financial Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if CNA Financial's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues10.4 B11.9 B
Fairly Down
Increasing
Slightly volatile
Trade and Non Trade Receivables7.4 B8.4 B
Fairly Down
Decreasing
Stable
Property Plant and Equipment Net245.1 M226 M
Significantly Up
Decreasing
Slightly volatile
Operating Income1.5 B1.6 B
Sufficiently Down
Increasing
Slightly volatile
Net Cash Flow from Operations1.6 BB
Significantly Down
Increasing
Slightly volatile
Total Liabilities47.7 B53.8 B
Fairly Down
Increasing
Slightly volatile
Investments53.6 B50.3 B
Notably Up
Increasing
Slightly volatile
Gross Margin0.350.355
Fairly Down
Decreasing
Slightly volatile
Depreciation Amortization and Accretion62.8 M54 M
Fairly Up
Decreasing
Slightly volatile
Total DebtB2.8 B
Significantly Up
Increasing
Slightly volatile
Total Assets59.5 B66.6 B
Moderately Down
Increasing
Slightly volatile

CNA Financial Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between CNA Financial's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards CNA Financial in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find CNA Financial's degree of accounting gimmicks and manipulations.

About CNA Financial Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Expenses

2.48 Billion

CNA Financial Operating Expenses is projected to decrease significantly based on the last few years of reporting. The past year's Operating Expenses was at 2.63 Billion

CNA Financial Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as CNA Financial. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Trade and Non Trade Receivables6.55 B6.75 B6.63 B7.06 B8.41 B7.44 B
Revenues9.54 B10.13 B10.77 B10.81 B11.91 B10.45 B
Total Assets56.57 B57.15 B60.61 B64.03 B66.64 B59.53 B
Total Liabilities44.32 B45.94 B48.4 B51.32 B53.83 B47.7 B
Total Debt2.86 B2.68 B2.68 B2.78 B2.78 B3.01 B
Operating Income1.47 B1.1 B1.35 B943 M1.6 B1.54 B
Net Cash Flow from Operations1.25 B1.23 B1.14 B1.77 B2 B1.6 B
Investments46.87 B44.49 B47.74 B50.29 B50.33 B53.55 B

CNA Financial ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, CNA Financial's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to CNA Financial's managers, analysts, and investors.
Environment Score
Governance Score
Social Score

About CNA Financial Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze CNA Financial's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of CNA Financial using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of CNA Financial based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
CNA Financial Corporation provides commercial property and casualty insurance products primarily in the United States. CNA Financial Corporation operates as a subsidiary of Loews Corporation. Cna Financial operates under InsuranceProperty Casualty classification in the United States and is traded on New York Stock Exchange. It employs 5600 people.

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Our tools can tell you how much better you can do entering a position in CNA Financial without increasing your portfolio risk or giving up the expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate risk-adjusted returns of your individual positions relative to your overall portfolio.

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Pair Trading with CNA Financial

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if CNA Financial position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CNA Financial will appreciate offsetting losses from the drop in the long position's value.

Moving together with CNA Financial

+0.78BLKBlackRock Fiscal Year End 13th of January 2023 PairCorr
The ability to find closely correlated positions to CNA Financial could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace CNA Financial when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back CNA Financial - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling CNA Financial to buy it.
The correlation of CNA Financial is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as CNA Financial moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if CNA Financial moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for CNA Financial can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Continue to CNA Financial Piotroski F Score and CNA Financial Altman Z Score analysis. You can also try Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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Is CNA Financial's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of CNA Financial. If investors know CNA Financial will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about CNA Financial listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
(0.50) 
Market Capitalization
11.5 B
Quarterly Revenue Growth YOY
(0.001) 
Return On Assets
0.0121
Return On Equity
0.0879
The market value of CNA Financial is measured differently than its book value, which is the value of CNA Financial that is recorded on the company's balance sheet. Investors also form their own opinion of CNA Financial's value that differs from its market value or its book value, called intrinsic value, which is CNA Financial's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because CNA Financial's market value can be influenced by many factors that don't directly affect CNA Financial's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between CNA Financial's value and its price as these two are different measures arrived at by different means. Investors typically determine CNA Financial value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, CNA Financial's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.