Monroe Capital (FRA:6JT) Beneish M-Score : -2.61 (As of Jun. 23, 2024)

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What is Monroe 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 -2.61 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:

FRA:6JT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.41 Med: -1.07 Max: 9.07
Current: -2.61

During the past 13 years, the highest Beneish M-Score of Monroe Capital was 9.07. The lowest was -3.41. And the median was -1.07.

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 * 1.3476

0.528 * 1

0.404 * 1

0.892 * 0.8439

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.211

4.679 * -0.057613

0.327 * 1.0289

-2.61

* 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 (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was €19.21 Mil.
Revenue was 3.966 + 2.799 + 0.888 + -2.788 = €4.87 Mil.
Gross Profit was 3.966 + 2.799 + 0.888 + -2.788 = €4.87 Mil.
Total Current Assets was €0.00 Mil.
Total Assets was €485.29 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 €2.94 Mil.
Total Current Liabilities was €0.00 Mil.
Long-Term Debt & Capital Lease Obligation was €293.29 Mil.
Net Income was 2.939 + 1.453 + -0.221 + -4.002 = €0.17 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0.00 Mil.
Cash Flow from Operations was -11.302 + 29.265 + -4.926 + 15.091 = €28.13 Mil.

Total Receivables was €16.90 Mil.
Revenue was 4.19 + 5.586 + 1.393 + -5.404 = €5.77 Mil.
Gross Profit was 4.19 + 5.586 + 1.393 + -5.404 = €5.77 Mil.
Total Current Assets was €0.00 Mil.
Total Assets was €522.54 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 €2.87 Mil.
Total Current Liabilities was €0.00 Mil.
Long-Term Debt & Capital Lease Obligation was €306.92 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)
	=	(19.214 / 4.865)	/	(16.895 / 5.765)
	=	3.949435	/	2.930616
	=	1.3476

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)
	=	(5.765 / 5.765)	/	(4.865 / 4.865)
	=	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) / 485.289)	/	(1 - (0 + 0) / 522.54)
	=	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
	=	4.865	/	5.765
	=	0.8439

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)
	=	(2.936 / 4.865)	/	(2.873 / 5.765)
	=	0.603494	/	0.498352
	=	1.211

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)
	=	((293.289 + 0) / 485.289)	/	((306.922 + 0) / 522.54)
	=	0.604359	/	0.587366
	=	1.0289

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
	=	(0.169 - 0	-	28.128)	/	485.289
	=	-0.057613

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 -2.61 suggests that the company is unlikely to be a manipulator.

Monroe Capital Beneish M-Score Related Terms

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Monroe Capital (FRA:6JT) Business Description

Industry

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MRCC:USA

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.