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Burford Capital (Burford Capital) Beneish M-Score : 1.36 (As of May. 05, 2024)


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What is Burford Capital 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.

Warning Sign:

Beneish M-Score 1.36 higher than -1.78, which implies that the company might have manipulated its financial results.

The historical rank and industry rank for Burford Capital's Beneish M-Score or its related term are showing as below:

BUR' s Beneish M-Score Range Over the Past 10 Years
Min: 1.36   Med: 1.36   Max: 1.36
Current: 1.36

During the past 13 years, the highest Beneish M-Score of Burford Capital was 1.36. The lowest was 1.36. And the median was 1.36.


Burford Capital 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 Burford Capital 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 * 0.4196+0.528 * 1+0.404 * 0.9687+0.892 * 4.9644+0.115 * 1
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.2637+4.679 * 0.151644-0.327 * 0.9646
=1.36

* 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 $287.1 Mil.
Revenue was 129.998 + 320.683 + 18.706 + 339.414 = $808.8 Mil.
Gross Profit was 129.998 + 320.683 + 18.706 + 339.414 = $808.8 Mil.
Total Current Assets was $507.6 Mil.
Total Assets was $5,837.4 Mil.
Property, Plant and Equipment(Net PPE) was $17.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.0 Mil.
Selling, General, & Admin. Expense(SGA) was $64.3 Mil.
Total Current Liabilities was $280.6 Mil.
Long-Term Debt & Capital Lease Obligation was $1,550.6 Mil.
Net Income was 100.095 + 272.542 + -21.54 + 259.425 = $610.5 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -70.431 + 15.612 + -203.774 + -16.089 = $-274.7 Mil.
Total Receivables was $137.8 Mil.
Revenue was 93 + -46.461 + 18.346 + 98.034 = $162.9 Mil.
Gross Profit was 93 + -46.461 + 18.346 + 98.034 = $162.9 Mil.
Total Current Assets was $245.5 Mil.
Total Assets was $4,288.4 Mil.
Property, Plant and Equipment(Net PPE) was $14.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.0 Mil.
Selling, General, & Admin. Expense(SGA) was $49.1 Mil.
Total Current Liabilities was $128.2 Mil.
Long-Term Debt & Capital Lease Obligation was $1,266.4 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)
=(287.071 / 808.801) / (137.822 / 162.919)
=0.354934 / 0.845954
=0.4196

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)
=(162.919 / 162.919) / (808.801 / 808.801)
=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 - (507.62 + 17.412) / 5837.394) / (1 - (245.48 + 14.029) / 4288.359)
=0.910057 / 0.939485
=0.9687

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
=808.801 / 162.919
=4.9644

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 / (0 + 14.029)) / (0 / (0 + 17.412))
=0 / 0
=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)
=(64.257 / 808.801) / (49.078 / 162.919)
=0.079447 / 0.301242
=0.2637

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)
=((1550.583 + 280.615) / 5837.394) / ((1266.444 + 128.183) / 4288.359)
=0.313701 / 0.325212
=0.9646

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
=(610.522 - 0 - -274.682) / 5837.394
=0.151644

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.

Burford Capital has a M-score of 1.36 signals that the company is likely to be a manipulator.


Burford Capital Beneish M-Score Related Terms

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Burford Capital (Burford Capital) Business Description

Traded in Other Exchanges
Address
Hirzel Street, Oak House, St Peter Port, GGY, GY1 2NP
Burford Capital Ltd is a finance firm providing litigation finance, insurance, and risk transfer, law firm lending, corporate intelligence and judgment enforcement, and a wide range of investment activities. It operates in two segments: Capital provision, which is the provision of capital to the legal industry or in connection with legal matters, both directly and through investment in the group's managed funds; Asset management and other services, which includes the provision of services to the legal industry, including litigation insurance; and other corporate. The geographical segments include the United States, United Kingdom, Singapore, Hong Kong, China, and, Australia.
Executives
Alrajhi Turki Saleh A. other: Director to Mithaq Capital SPC MITHAQ CAPITAL, C/O SYNERGY, ANAS IBN MALIK ROAD, AL MALQA, RIYADH T0 13521
Muhammad Asif Seemab other: Director to Mithaq Capital SPC MITHAQ CAPITAL, C/O SYNERGY, ANAS IBN MALIK ROAD, AL MALQA, RIYADH T0 13521
Capital Spc Mithaq 10 percent owner C/O SYNERGY, ANAS IBN MALIK ROAD, AL MALQA, RIYADH T0 13521
Capital Mithaq 10 percent owner C/O SYNERGY, ANAS IBN MALIK ROAD, AL MALQA, RIYADH T0 13521