Sachem Capital (Sachem Capital) Beneish M-Score : -2.60 (As of Apr. 26, 2024)

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What is Sachem 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.

Good Sign:

Beneish M-Score -2.6 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

SACH' s Beneish M-Score Range Over the Past 10 Years
Min: -2.7 Med: -2.09 Max: -1.55
Current: -2.6

During the past 10 years, the highest Beneish M-Score of Sachem Capital was -1.55. The lowest was -2.70. And the median was -2.09.

Sachem 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 Sachem 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 * 0.9581

0.528 * 1

0.404 * 1.0775

0.892 * 1.105

0.115 * 0.343

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.315

4.679 * -0.009523

0.327 * 1.0939

-2.60

* 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 $15.99 Mil.
Revenue was 7.405 + 8.871 + 8.292 + 7.433 = $32.00 Mil.
Gross Profit was 7.405 + 8.871 + 8.292 + 7.433 = $32.00 Mil.
Total Current Assets was $28.59 Mil.
Total Assets was $625.54 Mil.
Property, Plant and Equipment(Net PPE) was $3.37 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.27 Mil.
Selling, General, & Admin. Expense(SGA) was $12.22 Mil.
Total Current Liabilities was $73.40 Mil.
Long-Term Debt & Capital Lease Obligation was $284.10 Mil.
Net Income was -1.109 + 6.19 + 5.698 + 5.12 = $15.90 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 2.911 + 6.86 + 7.076 + 5.009 = $21.86 Mil.

Total Receivables was $15.11 Mil.
Revenue was 8.645 + 7.042 + 7.209 + 6.065 = $28.96 Mil.
Gross Profit was 8.645 + 7.042 + 7.209 + 6.065 = $28.96 Mil.
Total Current Assets was $63.40 Mil.
Total Assets was $565.66 Mil.
Property, Plant and Equipment(Net PPE) was $4.12 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.11 Mil.
Selling, General, & Admin. Expense(SGA) was $8.41 Mil.
Total Current Liabilities was $14.72 Mil.
Long-Term Debt & Capital Lease Obligation was $280.81 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)
	=	(15.994 / 32.001)	/	(15.107 / 28.961)
	=	0.499797	/	0.521633
	=	0.9581

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)
	=	(28.961 / 28.961)	/	(32.001 / 32.001)
	=	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 - (28.592 + 3.373) / 625.539)	/	(1 - (63.396 + 4.122) / 565.662)
	=	0.9489	/	0.880639
	=	1.0775

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
	=	32.001	/	28.961
	=	1.105

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))
	=	(0.106 / (0.106 + 4.122))	/	(0.266 / (0.266 + 3.373))
	=	0.025071	/	0.073097
	=	0.343

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)
	=	(12.224 / 32.001)	/	(8.413 / 28.961)
	=	0.381988	/	0.290494
	=	1.315

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)
	=	((284.099 + 73.396) / 625.539)	/	((280.805 + 14.723) / 565.662)
	=	0.571499	/	0.522446
	=	1.0939

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
	=	(15.899 - 0	-	21.856)	/	625.539
	=	-0.009523

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.

Sachem Capital has a M-score of -2.60 suggests that the company is unlikely to be a manipulator.

Sachem Capital Beneish M-Score Related Terms

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Sachem Capital (Sachem Capital) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Sachem Capital Corp (AMEX:SACH) » Definitions » Beneish M-Score

Comparable Companies

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Traded in Other Exchanges

SACHpA.PFD:USA

Address

538 East Main Street, Branford, CT, USA, 06405

Website

https://www.sachemcapitalcorp.com

Sachem Capital Corp is a United States-based real estate investment trust. The company specializes in originating, underwriting, funding, servicing, and managing a portfolio of short-term loans secured by first mortgage liens on real property located in Connecticut. Its primary objective is to grow the loan portfolio while protecting and preserving capital in a manner that provides for attractive risk-adjusted returns to shareholders over the long term through dividends. The company earns majority of its revenue through Interest income from loans.

Executives

Leslie Bernhard	director	C/O ADSTAR, INC., 488 S. ROYAL LANE, COPPELL TX 75019
Brian A Prinz	director	C/O SACHEM CAPITAL CORP., 23 LAUREL, BRANFORD CT 06405
Arthur L Goldberg	director	C/O MILESTONE SCIENTIFIC INC., 220 SOUTH ORANGE AVENUE, LIVINGSTON NJ 07039
William C Haydon	officer: See Remarks	C/O SACHEM CAPITAL CORP., 698 MAIN STREET, BRANFORD CT 06405
John E Warch	officer: See Remarks	FALCON FINANCIAL INVESTMENT TRUST, 15 COMMERCE RD, STAMFORD CT 06902
John L. Villano	director, officer: Chairman, CEO, President & CFO	23 LAUREL STREET, BRANFORD CT 06405
Peter J Cuozzo	officer: EVP and COO	C/O SACHEM CAPITAL CORP., 698 MAIN STREET, BRANFORD CT 06405
Jeffrey C Villano	director, 10 percent owner, officer: President,co-CEO and Treasurer	23 LAUREL STREET, BRANFORD CT 06405