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HTGC (Hercules Capital) Beneish M-Score : -1.99 (As of Mar. 02, 2025)


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What is Hercules 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 -1.99 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

HTGC' s Beneish M-Score Range Over the Past 10 Years
Min: -2.46   Med: -1.78   Max: 3.85
Current: -1.99

During the past 13 years, the highest Beneish M-Score of Hercules Capital was 3.85. The lowest was -2.46. And the median was -1.78.


Hercules 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 Hercules 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 * 1.1997+0.528 * 1+0.404 * 0.997+0.892 * 0.8294+0.115 * 1.4127
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2686+4.679 * 0.099451-0.327 * 1.0216
=-1.99

* 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 (Dec24) TTM:Last Year (Dec23) TTM:
Total Receivables was $32.6 Mil.
Revenue was 82.251 + 90.425 + 65.338 + 115.731 = $353.7 Mil.
Gross Profit was 82.251 + 90.425 + 65.338 + 115.731 = $353.7 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $3,831.6 Mil.
Property, Plant and Equipment(Net PPE) was $16.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.5 Mil.
Selling, General, & Admin. Expense(SGA) was $19.7 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt & Capital Lease Obligation was $1,787.1 Mil.
Net Income was 61.439 + 68.711 + 41.852 + 90.964 = $263.0 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -29.244 + 92.555 + 59.492 + -240.891 = $-118.1 Mil.
Total Receivables was $32.7 Mil.
Revenue was 139.354 + 51.489 + 118.122 + 117.53 = $426.5 Mil.
Gross Profit was 139.354 + 51.489 + 118.122 + 117.53 = $426.5 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $3,416.9 Mil.
Property, Plant and Equipment(Net PPE) was $4.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.2 Mil.
Selling, General, & Admin. Expense(SGA) was $18.7 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt & Capital Lease Obligation was $1,560.1 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)
=(32.578 / 353.745) / (32.741 / 426.495)
=0.092095 / 0.076768
=1.1997

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)
=(426.495 / 426.495) / (353.745 / 353.745)
=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 + 16.778) / 3831.591) / (1 - (0 + 4.787) / 3416.926)
=0.995621 / 0.998599
=0.997

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
=353.745 / 426.495
=0.8294

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))
=(0.19 / (0.19 + 4.787)) / (0.466 / (0.466 + 16.778))
=0.038176 / 0.027024
=1.4127

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)
=(19.672 / 353.745) / (18.696 / 426.495)
=0.055611 / 0.043836
=1.2686

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)
=((1787.149 + 0) / 3831.591) / ((1560.064 + 0) / 3416.926)
=0.466425 / 0.456569
=1.0216

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
=(262.966 - 0 - -118.088) / 3831.591
=0.099451

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.

Hercules Capital has a M-score of -1.99 suggests that the company is unlikely to be a manipulator.


Hercules Capital Beneish M-Score Related Terms

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Hercules Capital Business Description

Traded in Other Exchanges
Address
1 North B Street, Suite 2000, San Mateo, CA, USA, 94401
Hercules Capital Inc is a specialty finance company that provides senior secured loans to high-growth, venture capital-backed companies in various technology, life sciences, and sustainable and renewable technology industries. It invests majorly in structured debt with warrants and, to a lesser extent, in senior debt and equity investments. The company lends to and invests in portfolio companies in various technology-related industries, including technology, drug discovery and development, biotechnology, life sciences, healthcare, and sustainable and renewable technology.
Executives
Scott Bluestein officer: Chief Investment Officer 303 COLUMBUS AVENUE, APT 506, BOSTON MA 02116
Nikos Theodosopoulos director C/O ARISTA NETWORKS, INC., 5453 GREAT AMERICA PARKWAY, SANTA CLARA CA 95054
Deanne Aguirre director C/O HERCULES CAPITAL, INC., 400 HAMILTON AVENUE, SUITE 310, PALO ALTO CA 94301
Wade Loo director C/O HERCULES CAPITAL, INC., 400 HAMILTON AVENUE, SUITE 310, PALO ALTO CA 94301
Paramjeet K Randhawa director C/O HERCULES CAPITAL, INC., 400 HAMILTON AVENUE, SUITE 310, PALO ALTO CA 94301
Gayle A Crowell director
Thomas J Fallon director C/O INFINERA CORPORATION, 140 CASPIAN COURT, SUNNYVALE CA 94089
Robert P Badavas director C/O HERCULES CAPITAL, INC., 400 HAMILTON AVENUE, SUITE 310, PALO ALTO IL 94301
Christian Follmann officer: Chief Operating Officer C/O HERCULES CAPITAL, INC., 400 HAMILTON AVENUE, SUITE 310, PALO ALTO CA 94301
Kiersten Zaza Botelho officer: General Counsel & CCO C/O HERCULES CAPITAL, INC., 400 HAMILTON AVENUE, SUITE 310, PALO ALTO CA 94301
Carol L Foster director C/O HERCULES CAPITAL, INC., 400 HAMILTON AVENUE, SUITE 310, PALO ALTO CA 94301
Seth H Meyer officer: Chief Financial Officer C/O HERCULES CAPITAL, INC., 400 HAMILTON AVENUE, SUITE 310, PALO ALTO CA 94301
Jorge Titinger director 7005 SOUTHFRONT ROAD, LIVERMORE CA 94551
Doreen Woo Ho director C/O HERCULES CAPITAL, INC., 400 HAMILTON AVENUE, SUITE 310, PALO ALTO CA 94301
Waldt Gerard R Jr. officer: Interim Chief Accounting Off 400 HAMILTON AVENUE SUITE 310, PALO ALTO CA 94301