Scottish Oriental Smaller Trust (The) (LSE:SST) Beneish M-Score : 0.11 (As of Apr. 04, 2025)

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What is Scottish Oriental Smaller Trust (The) 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.

Warning Sign:

Beneish M-Score 0.11 higher than -1.78, which implies that the company might have manipulated its financial results.

The historical rank and industry rank for Scottish Oriental Smaller Trust (The)'s Beneish M-Score or its related term are showing as below:

LSE:SST' s Beneish M-Score Range Over the Past 10 Years
Min: -2.94 Med: -2.32 Max: 0.11
Current: 0.11

During the past 13 years, the highest Beneish M-Score of Scottish Oriental Smaller Trust (The) was 0.11. The lowest was -2.94. And the median was -2.32.

Scottish Oriental Smaller Trust (The) 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 Scottish Oriental Smaller Trust (The) 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

0.528 * 1

0.404 * 1

0.892 * 3.0734

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.3627

4.679 * 0.125816

0.327 * 0.8699

0.11

* 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 (Aug24) TTM:

Last Year (Aug23) TTM:

Total Receivables was £0.00 Mil.
Revenue was £75.79 Mil.
Gross Profit was £75.79 Mil.
Total Current Assets was £0.00 Mil.
Total Assets was £450.56 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 £0.78 Mil.
Total Current Liabilities was £0.00 Mil.
Long-Term Debt & Capital Lease Obligation was £29.84 Mil.
Net Income was £62.16 Mil.
Gross Profit was £0.00 Mil.
Cash Flow from Operations was £5.47 Mil.

Total Receivables was £0.00 Mil.
Revenue was £24.66 Mil.
Gross Profit was £24.66 Mil.
Total Current Assets was £0.00 Mil.
Total Assets was £391.80 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 £0.70 Mil.
Total Current Liabilities was £0.00 Mil.
Long-Term Debt & Capital Lease Obligation was £29.83 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 / 75.786)	/	(0 / 24.659)
	=	0	/	0
	=	1

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)
	=	(24.659 / 24.659)	/	(75.786 / 75.786)
	=	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) / 450.564)	/	(1 - (0 + 0) / 391.801)
	=	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
	=	75.786	/	24.659
	=	3.0734

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)
	=	(0.777 / 75.786)	/	(0.697 / 24.659)
	=	0.010253	/	0.028266
	=	0.3627

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)
	=	((29.842 + 0) / 450.564)	/	((29.832 + 0) / 391.801)
	=	0.066233	/	0.076141
	=	0.8699

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
	=	(62.156 - 0	-	5.468)	/	450.564
	=	0.125816

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.

Scottish Oriental Smaller Trust (The) has a M-score of 0.11 signals that the company is likely to be a manipulator.

Scottish Oriental Smaller Trust (The) Beneish M-Score Related Terms

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Scottish Oriental Smaller Trust (The) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Scottish Oriental Smaller Companies Trust (The) PLC (LSE:SST) » Definitions » Beneish M-Score

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Traded in Other Exchanges

N/A

Address

28 Walker Street, Edinburgh, GBR, EH3 7HR

Website

https://www.scottishoriental.com

Scottish Oriental Smaller Companies Trust (The) PLC is a investment trusts in the Asian equity category with a specialist focus on smaller companies. The objective of the Company is to achieve long-term capital growth by carefully selecting quality companies with franchises at reasonable valuations.