Monroe Capital (Monroe Capital) Beneish M-Score

: -2.75 (As of Today)

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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.

Good Sign:

Beneish M-Score -2.75 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

MRCC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.24 Med: -1.18 Max: 9.06
Current: -2.75

During the past 13 years, the highest Beneish M-Score of Monroe Capital was 9.06. The lowest was -3.24. And the median was -1.18.

Monroe 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 Monroe Capital 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 * 0.9662

0.528 * 1

0.404 * 0.9911

0.892 * 1.2169

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.745

4.679 * -0.100081

0.327 * 1.0021

-2.75

* 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 $19.35 Mil.
Revenue was 3.052 + 0.948 + -3.021 + 4.486 = $5.47 Mil.
Gross Profit was 3.052 + 0.948 + -3.021 + 4.486 = $5.47 Mil.
Total Current Assets was $24.31 Mil.
Total Assets was $513.19 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 $2.98 Mil.
Total Current Liabilities was $8.60 Mil.
Long-Term Debt & Capital Lease Obligation was $300.87 Mil.
Net Income was 1.584 + -0.236 + -4.336 + 3.359 = $0.37 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 31.914 + -5.257 + 16.35 + 8.724 = $51.73 Mil.

Total Receivables was $16.46 Mil.
Revenue was 5.917 + 1.379 + -5.712 + 2.907 = $4.49 Mil.
Gross Profit was 5.917 + 1.379 + -5.712 + 2.907 = $4.49 Mil.
Total Current Assets was $21.91 Mil.
Total Assets was $565.00 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 $3.29 Mil.
Total Current Liabilities was $9.86 Mil.
Long-Term Debt & Capital Lease Obligation was $330.11 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)
	=	(19.349 / 5.465)	/	(16.457 / 4.491)
	=	3.540531	/	3.66444
	=	0.9662

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)
	=	(4.491 / 4.491)	/	(5.465 / 5.465)
	=	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 - (24.307 + 0) / 513.186)	/	(1 - (21.907 + 0) / 564.995)
	=	0.952635	/	0.961226
	=	0.9911

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
	=	5.465	/	4.491
	=	1.2169

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))
	=		/
	=	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)
	=	(2.98 / 5.465)	/	(3.287 / 4.491)
	=	0.545288	/	0.731908
	=	0.745

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)
	=	((300.865 + 8.597) / 513.186)	/	((330.114 + 9.862) / 564.995)
	=	0.603021	/	0.601733
	=	1.0021

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
	=	(0.371 - 0	-	51.731)	/	513.186
	=	-0.100081

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.

Monroe Capital has a M-score of -2.75 suggests that the company is unlikely to be a manipulator.

Monroe Capital Beneish M-Score Related Terms

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Monroe Capital (Monroe Capital) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Monroe Capital Corp (NAS:MRCC) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

6JT:Germany

Address

311 South Wacker Drive, Suite 6400, Chicago, IL, USA, 60606

Website

https://www.monroebdc.com

Monroe Capital Corp is a speciality finance company focused on providing financing to lower middle-market companies, in the U.S. and Canada. The company provides customized financing solutions focused on senior, unitranche and junior secured debt and unsecured subordinated debt and equity, including equity co-investments in preferred and common stock and warrants. Its investment activities are managed by its investment adviser, Monroe Capital BDC Advisors, LLC.

Executives

Lewis Solimene	officer: CFO and CIO	C/O GSV GROWTH CREDIT FUND INC., 2925 WOODSIDE ROAD, WOODSIDE CA 94062
Caroline Davidson	director	311 SOUTH WACKER DRIVE, SUITE 6400, CHICAGO IL 60606
Thomas J. Allison	director	C/O MONROE CAPITAL CORPORATION, 311 SOUTH WACKER DRIVE, SUITE 6400, CHICAGO IL 60606
Jeffrey D. Steele	director	C/O MONROE CAPITAL CORPORATION, 311 SOUTH WACKER DRIVE, SUITE 6400, CHICAGO IL 60606
Jorde M. Nathan	director	C/O MONROE CAPITAL CORPORATION, 311 SOUTH WACKER DRIVE, SUITE 6400, CHICAGO IL 60606
Robert S Rubin	director	C/O MONROE CAPITAL CORPORATION, 311 SOUTH WACKER DRIVE, SUITE 6400, CHICAGO IL 60606
Theodore L Koenig	director, officer: Chairman, President & CEO	C/O MONROE CAPITAL CORPORATION, 311 SOUTH WACKER DRIVE, SUITE 6400, CHICAGO IL 60606
Aaron Daniel Peck	director, officer: See Remarks	C/O MONROE CAPITAL CORPORATION, 311 SOUTH WACKER DRIVE, SUITE 6400, CHICAGO IL 60606
Jeffrey A Golman	director	C/O MONROE CAPITAL CORPORATION, 311 SOUTH WACKER DRIVE, SUITE 6400, CHICAGO IL 60606