ARCC (Ares Capital) Beneish M-Score: -2.08 (As of Aug. 20, 2026)

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ARCC Ares Capital Corp ARCC
57 GF Score
Price $19.80
GF Value $19.69
Valuation Fairly Valued
! 8 Warning Signs
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What is Ares Capital Beneish M-Score?

Ares Capital ARCC +0.66% 57 Beneish M-Score is -2.08 as of Aug. 20, 2026. GuruFocus rates ARCC with a GF Score™ of 57/100 and a GF Value™ of $19.69 (Fairly Valued). The stock has 8 warning signs investors should review. Among 957 Asset Management companies, Ares Capital ranks worse than 57.05% on this metric.

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 -2.08 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

ARCC' s Beneish M-Score Range Over the Past 10 Years
Min: -2.62   Med: -1.65   Max: 137.21
Current: -2.08

During the past 13 years, the highest Beneish M-Score of Ares Capital was 137.21. The lowest was -2.62. And the median was -1.65.

ARCC
57GF Score
Ares Capital Corp ARCC
Beneish M-Score is just one metric. See GF Score™, valuation, warning signs, and more.
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Ares 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 Ares 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 * 1.5097+0.528 * 1+0.404 * 1+0.892 * 0.7555+0.115 * 1
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4645+4.679 * 0.053774-0.327 * 1.0656
=-2.08

* 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 (Jun26) TTM:Last Year (Jun25) TTM:
Total Receivables was $349 Mil.
Revenue was 219 + 151 + 344 + 460 = $1,174 Mil.
Gross Profit was 219 + 151 + 344 + 460 = $1,174 Mil.
Total Current Assets was $0 Mil.
Total Assets was $30,498 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General, & Admin. Expense(SGA) was $52 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt & Capital Lease Obligation was $15,773 Mil.
Net Income was 171 + 92 + 293 + 404 = $960 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 336 + 184 + -427 + -773 = $-680 Mil.
 Total Receivables was $306 Mil.
Revenue was 407 + 296 + 415 + 436 = $1,554 Mil.
Gross Profit was 407 + 296 + 415 + 436 = $1,554 Mil.
Total Current Assets was $0 Mil.
Total Assets was $29,071 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General, & Admin. Expense(SGA) was $47 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt & Capital Lease Obligation was $14,109 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)
=(349 / 1174) / (306 / 1554)
=0.297274 / 0.196911
=1.5097

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)
=(1554 / 1554) / (1174 / 1174)
=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 - (0 + 0) / 30498) / (1 - (0 + 0) / 29071)
=1 / 1
=1

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
=1174 / 1554
=0.7555

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)
=(52 / 1174) / (47 / 1554)
=0.044293 / 0.030245
=1.4645

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)
=((15773 + 0) / 30498) / ((14109 + 0) / 29071)
=0.517181 / 0.485329
=1.0656

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
=(960 - 0 - -680) / 30498
=0.053774

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.

Ares Capital has a M-score of -2.08 suggests that the company is unlikely to be a manipulator.

Frequently Asked Questions Learn more about Beneish M-Score →
What does a Beneish M-Score of -2.08 mean?
Ares Capital (ARCC) has a Beneish M-Score of -2.08 as of Aug. 20, 2026. The Beneish M-score measures the likelihood of earnings manipulation. View historical data on Ares Capital and its competitors. According to the industry distribution chart, Ares Capital ranks #546 out of 957 companies in the Asset Management industry, placing it in the top 57.1%.
Is Ares Capital's Beneish M-Score too high?
Ares Capital's current Beneish M-Score is -2.08. Based on the distribution chart, Ares Capital ranks #546 out of 957 companies in the Asset Management industry, which is below the industry midpoint. Overall, Ares Capital has a GF Score™ of 57/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Ares Capital's Beneish M-Score compare to PS and IVZ?
According to the Asset Management industry distribution chart, Ares Capital ranks #546 out of 957 companies for Beneish M-Score. This places Ares Capital in the lower half of its industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Beneish M-Score for an Asset Management company?
A good Beneish M-Score depends on the Asset Management industry context. However, Beneish M-Score should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Beneish M-Score mean?
A high Beneish M-Score can signal that a stock is expensive relative to its fundamentals. The Beneish M-score measures the likelihood of earnings manipulation. View historical data on Ares Capital and its competitors. Ares Capital's current Beneish M-Score is -2.08. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Ares Capital stock overvalued right now?
Based on GuruFocus' analysis, Ares Capital (ARCC) is currently considered Fairly Valued. The stock's GF Value™ is $19.69, compared to a current price of $19.80 — trading 0.6% above its estimated fair value. The current Beneish M-Score is -2.08. Ares Capital's overall GF Score™ is 57/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Beneish M-Score calculated?
Beneish M-Score is calculated from a company's financial statements. For Ares Capital (ARCC), the current Beneish M-Score is -2.08 as of Aug. 20, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

Is Ares Capital (ARCC) Overvalued in 2026?

Based on GuruFocus' analysis, Ares Capital stock appears to be overvalued. The current stock price of $19.80 is trading 0.6% above its estimated GF Value™ of $19.69. GuruFocus considers Ares Capital to be Fairly Valued.

Key valuation signals for ARCC:

  • Beneish M-Score: -2.08
  • GF Value™: $19.69 vs. price of $19.80 (0.6% above fair value)
  • GF Score™: 57/100 with 8 warning signs

No single metric tells the full story. See the ARCC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.

Ares Capital Business Description

Other Exchanges 0HHP:UK9A2:Germany
Address 245 Park Avenue, 44th Floor, New York, NY, USA, 10167
Ares Capital Corp is a United States-based closed-ended specialty finance company. Its investment objective is to generate both current income and capital appreciation through debt and equity investments. The company focuses on investing in first lien senior secured loans (including unitranche loans, which are loans that combine both senior and subordinated debt, generally in a first lien position) and second lien senior secured loans. In addition to senior secured loans, the company also invests in subordinated loans and preferred equity, it also makes common equity investments.
57GF Score

Get the complete analysis for ARCC

Beneish M-Score is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.

$19.80
Price
$19.69
GF Value