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Horizon Technology Finance (Horizon Technology Finance) Beneish M-Score

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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.

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

During the past 13 years, the highest Beneish M-Score of Horizon Technology Finance was 0.52. The lowest was -2.06. And the median was -1.30.


Horizon Technology Finance 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 Horizon Technology Finance 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

* 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 $13.93 Mil.
Revenue was -8.08 + -10.516 + 1.692 + 7.033 = $-9.87 Mil.
Gross Profit was -8.08 + -10.516 + 1.692 + 7.033 = $-9.87 Mil.
Total Current Assets was $60.56 Mil.
Total Assets was $802.36 Mil.
Property, Plant and Equipment(Net PPE) was $0.00 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General, & Admin. Expense(SGA) was $5.67 Mil.
Total Current Liabilities was $12.06 Mil.
Long-Term Debt & Capital Lease Obligation was $462.24 Mil.
Net Income was -10.661 + -11.98 + 0.152 + 5.306 = $-17.18 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 11.224 + -23.726 + -5.484 + 12.73 = $-5.26 Mil.
Total Receivables was $13.57 Mil.
Revenue was 5.806 + 7.2 + 8.73 + 4.905 = $26.64 Mil.
Gross Profit was 5.806 + 7.2 + 8.73 + 4.905 = $26.64 Mil.
Total Current Assets was $34.19 Mil.
Total Assets was $766.83 Mil.
Property, Plant and Equipment(Net PPE) was $0.00 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.00 Mil.
Selling, General, & Admin. Expense(SGA) was $4.78 Mil.
Total Current Liabilities was $11.62 Mil.
Long-Term Debt & Capital Lease Obligation was $434.08 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)
=(13.926 / -9.871) / (13.573 / 26.641)
= / 0.509478
=

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)
=(26.641 / 26.641) / (-9.871 / -9.871)
=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 - (60.556 + 0) / 802.356) / (1 - (34.185 + 0) / 766.826)
=0.924527 / 0.95542
=

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
=-9.871 / 26.641
=

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 + 0)) / (0 / (0 + 0))
= /
=

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)
=(5.671 / -9.871) / (4.775 / 26.641)
= / 0.179235
=

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)
=((462.235 + 12.063) / 802.356) / ((434.078 + 11.616) / 766.826)
=0.591132 / 0.581219
=

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
=(-17.183 - 0 - -5.256) / 802.356
=-0.014865

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.


Horizon Technology Finance Beneish M-Score Related Terms

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Horizon Technology Finance (Horizon Technology Finance) Business Description

Traded in Other Exchanges
N/A
Address
312 Farmington Avenue, Farmington, CT, USA, 06032
Horizon Technology Finance Corp is a specialty finance company. Its investment objective is to maximize its investment portfolio's total return by generating current income from the debt investments it makes and capital appreciation from the warrants it receives when making such debt investments. It lends to and invests in development-stage companies in the technology, life science, healthcare information and services and sustainability industries.
Executives
Michael Balkin director C/O FORESIGHT ACQUISITION CORP., 233 N. MICHIGAN AVE., SUITE 1410, CHICAGO IL 60601
Jonathan Joseph Goodman director 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Kimberley Ann O'connor director 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Dombrowski Lynn Denise Murray officer: Chief Accounting Officer 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Gerald A. Michaud director, officer: President 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Pomeroy Robert D. Jr. director, officer: Chief Executive Officer 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Daniel R. Trolio officer: CFO 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Edmund V. Mahoney director 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Joseph J Savage director WEBSTER FINANCIAL CORP, 145 BANK ST, WATERBURY CT 06702
Elaine A Sarsynski director 312 FARMINGTON AVE, FARMINGTON CT 06032
Diane Earle officer: Chief Credit Officer 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Christopher M. Mathieu officer: SVP, CFO and Treasurer 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Christopher B. Woodward director 312 FARMINGTON AVENUE, FARMINGTON CT 06032
Compass Group Investments, Ltd. 10 percent owner BELVEDERE BUILDING, 69 PITTS BAY ROAD, HAMILTON HM 08 D0 00000
David P. Swanson director 312 FARMINGTON AVENUE, FARMINGTON CT 06032