Cavendish Financial (LSE:CAV) Beneish M-Score : -1.82 (As of Jun. 05, 2024)

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What is Cavendish Financial Beneish M-Score?

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 -1.82 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

LSE:CAV' s Beneish M-Score Range Over the Past 10 Years
Min: -3 Med: -1.6 Max: 2.99
Current: -1.82

During the past 8 years, the highest Beneish M-Score of Cavendish Financial was 2.99. The lowest was -3.00. And the median was -1.60.

Cavendish Financial Beneish M-Score Historical Data

The historical data trend for Cavendish Financial's Beneish M-Score can be seen below:

* 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.

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Cavendish Financial Beneish M-Score Chart

Cavendish Financial Annual Data

Trend

Apr15

Apr16

Apr17

Apr18

Mar20

Mar21

Mar22

Mar23

Beneish M-Score

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-1.45

2.99

-3.00

-1.48

-1.82

Cavendish Financial Semi-Annual Data
	Apr16	Apr17	Oct17	Apr18	Oct18	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Beneish M-Score	Get a 7-Day Free Trial									-	-1.48	-	-1.82	-

Competitive Comparison of Cavendish Financial's Beneish M-Score

For the Capital Markets subindustry, Cavendish Financial's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Cavendish Financial's Beneish M-Score Distribution in the Capital Markets Industry

For the Capital Markets industry and Financial Services sector, Cavendish Financial's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Cavendish Financial's Beneish M-Score falls into.

Cavendish Financial 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 Cavendish Financial 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 * 1.5575

0.528 * 1.1582

0.404 * 1.4497

0.892 * 0.6254

0.115 * 0.9178

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.9269

4.679 * 0.081787

0.327 * 0.9948

-1.82

This Year (Mar23) TTM:

Last Year (Mar22) TTM:

Total Receivables was £12.74 Mil.
Revenue was £32.86 Mil.
Gross Profit was £13.51 Mil.
Total Current Assets was £22.84 Mil.
Total Assets was £51.96 Mil.
Property, Plant and Equipment(Net PPE) was £12.24 Mil.
Depreciation, Depletion and Amortization(DDA) was £1.85 Mil.
Selling, General, & Admin. Expense(SGA) was £10.82 Mil.
Total Current Liabilities was £15.48 Mil.
Long-Term Debt & Capital Lease Obligation was £10.49 Mil.
Net Income was £-5.52 Mil.
Gross Profit was £0.00 Mil.
Cash Flow from Operations was £-9.77 Mil.

Total Receivables was £13.07 Mil.
Revenue was £52.55 Mil.
Gross Profit was £25.01 Mil.
Total Current Assets was £38.38 Mil.
Total Assets was £66.62 Mil.
Property, Plant and Equipment(Net PPE) was £13.30 Mil.
Depreciation, Depletion and Amortization(DDA) was £1.82 Mil.
Selling, General, & Admin. Expense(SGA) was £8.98 Mil.
Total Current Liabilities was £21.46 Mil.
Long-Term Debt & Capital Lease Obligation was £12.00 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)
	=	(12.736 / 32.864)	/	(13.074 / 52.545)
	=	0.387537	/	0.248815
	=	1.5575

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)
	=	(25.013 / 52.545)	/	(13.507 / 32.864)
	=	0.47603	/	0.410997
	=	1.1582

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 - (22.837 + 12.239) / 51.964)	/	(1 - (38.38 + 13.304) / 66.618)
	=	0.324994	/	0.224174
	=	1.4497

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
	=	32.864	/	52.545
	=	0.6254

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))
	=	(1.822 / (1.822 + 13.304))	/	(1.849 / (1.849 + 12.239))
	=	0.120455	/	0.131246
	=	0.9178

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)
	=	(10.82 / 32.864)	/	(8.978 / 52.545)
	=	0.329236	/	0.170863
	=	1.9269

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)
	=	((10.489 + 15.475) / 51.964)	/	((12.002 + 21.459) / 66.618)
	=	0.499654	/	0.502282
	=	0.9948

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
	=	(-5.518 - 0	-	-9.768)	/	51.964
	=	0.081787

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.

Cavendish Financial has a M-score of -1.82 suggests that the company is unlikely to be a manipulator.

Cavendish Financial Beneish M-Score Related Terms

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Cavendish Financial (LSE:CAV) Business Description

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Address

1 Bartholomew Close, London, GBR, EC1A 7BL

Website

https://www.finncapcavendish.com

Cavendish Financial Plc is one of the UK's leading mid-market M&A advisers with unrivalled expertise in sell-side M&A, buy-side M&A, debt advisory and private fundraising services. The Group provides a range of services to both public and private companies, from equity raising in capital markets to M&A, debt advisory, and private growth capital.

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