Equus Total Return (Equus Total Return) Beneish M-Score : 4.90 (As of Apr. 24, 2024)

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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.

Warning Sign:

Beneish M-Score 4.9 higher than -1.78, which implies that the company might have manipulated its financial results.

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

EQS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.13 Med: -1.58 Max: 4.9
Current: 4.9

During the past 13 years, the highest Beneish M-Score of Equus Total Return was 4.90. The lowest was -3.13. And the median was -1.58.

Equus Total Return 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 Equus Total Return 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 * 0.1509

0.528 * 1

0.404 * 1.747

0.892 * 6.8915

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.1632

4.679 * 0.687441

0.327 * 3.2992

4.90

* 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 $0.36 Mil.
Revenue was 2.14 + 8.241 + 6.82 + 0.007 = $17.21 Mil.
Gross Profit was 2.14 + 8.241 + 6.82 + 0.007 = $17.21 Mil.
Total Current Assets was $6.90 Mil.
Total Assets was $93.55 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 $2.31 Mil.
Total Current Liabilities was $0.28 Mil.
Long-Term Debt & Capital Lease Obligation was $44.96 Mil.
Net Income was 1.058 + 7.077 + 5.945 + -1.131 = $12.95 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was -33.938 + -7.683 + -4.258 + -5.48 = $-51.36 Mil.

Total Receivables was $0.35 Mil.
Revenue was 0.001 + -0.002 + 0.5 + 1.998 = $2.50 Mil.
Gross Profit was 0.001 + -0.002 + 0.5 + 1.998 = $2.50 Mil.
Total Current Assets was $19.57 Mil.
Total Assets was $41.66 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 $2.05 Mil.
Total Current Liabilities was $0.11 Mil.
Long-Term Debt & Capital Lease Obligation was $6.00 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)
	=	(0.364 / 17.208)	/	(0.35 / 2.497)
	=	0.021153	/	0.140168
	=	0.1509

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)
	=	(2.497 / 2.497)	/	(17.208 / 17.208)
	=	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 - (6.897 + 0) / 93.547)	/	(1 - (19.574 + 0) / 41.664)
	=	0.926272	/	0.530194
	=	1.747

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
	=	17.208	/	2.497
	=	6.8915

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)
	=	(2.309 / 17.208)	/	(2.053 / 2.497)
	=	0.134182	/	0.822187
	=	0.1632

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)
	=	((44.955 + 0.276) / 93.547)	/	((5.998 + 0.108) / 41.664)
	=	0.483511	/	0.146553
	=	3.2992

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
	=	(12.949 - 0	-	-51.359)	/	93.547
	=	0.687441

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.

Equus Total Return has a M-score of 4.90 signals that the company is likely to be a manipulator.

Equus Total Return Beneish M-Score Related Terms

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Equus Total Return (Equus Total Return) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Equus Total Return Inc (NYSE:EQS) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

700 Louisiana Street, 48th Floor, Houston, TX, USA, 77002

Website

http://www.equuscap.com

Equus Total Return Inc is a United States-based closed-end management investment company providing financial solutions for privately-owned middle market and small capitalization companies. Its investment objective is to seek the highest total return, consisting of capital appreciation and current income. It focuses to provide long-term capital gains by investing in the debt and equity securities of small and middle-market capitalization companies that are generally not publicly traded at the time of its investment. Its investment operations include investment selection, due diligence, structuring investments, and providing management assistance and monitoring of investments.

Executives

Robert L Knauss	director	5151 SAN FELIPE, SUITE 1661, HOUSTON TX 77056
Pallieres Bertrand Des	director	EQUUS TOTAL RETURN, INC., 8 GREENWAY PLAZA, SUITE 930, HOUSTON TX 77046
Michael T Tokarz	10 percent owner	287 BOWMAN AVENUE, SUITE 331, PURCHASE NY 10577
Mvc Capital, Inc.	10 percent owner	RIVERVIEW AT PURCHASE, 287 BOWMAN AVENUE, 3RD FLOOR, PURCHASE NY 10577
Tokarz Group Advisers Llc	10 percent owner	RIVERVIEW PLAZA, 287 BOWMAN AVENUE, 2ND FLOOR, PURCHASE NY 10577
John A. Hardy	director	C/O EQUUS TOTAL RETURN, INC., 8 GREENWAY PLAZA, SUITE 930, HOUSTON TX 77046
Richard F Bergner	director	2727 ALLEN PARKWAY, 13TH FLOOR, HOUSTON TX 77019
Fraser Atkinson	director	C/O EQUUS TOTAL RETURN, INC., 8 GREENWAY PLAZA, SUITE 930, HOUSTON TX 77046
Henry W Hankinson	director	2727 ALLEN PARKWAY, 13TH FLOOR, HOUSTON TX 77019
Kenneth I Denos	officer: Executive VP and Secretary	10757 SOUTH RIVER FRONT PARKWAY, SUITE 125, SOUTH JORDAN UT 84095
Mobiquity Investments Ltd	director	19105 36TH AVENUE WEST, SUITE 213, LYNNWOOD WA 98036
Alessandro Benedetti	director	C/O EQUUS TOTAL RETURN, INC., 8 GREENWAY PLAZA, SUITE 930, HOUSTON TX 77046
Tiel Trust Fbo Paula T. Douglass	10 percent owner	P.O. BOX 130197, HOUSTON TX 77219
Tiel Trust Fbo Sam P. Douglass	10 percent owner	P.O. BOX 130197, HOUSTON TX 77219
Douglass Trust Iv - Fbo S. Preston Douglass	10 percent owner	P.O. BOX 130197, HOUSTON TX 77219