Gladstone Capital (Gladstone Capital) Beneish M-Score : -0.44 (As of Apr. 26, 2024)

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What is Gladstone 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.

Warning Sign:

Beneish M-Score -0.44 higher than -1.78, which implies that the company might have manipulated its financial results.

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

GLAD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.28 Med: -1.43 Max: 11.06
Current: -0.44

During the past 13 years, the highest Beneish M-Score of Gladstone Capital was 11.06. The lowest was -3.28. And the median was -1.43.

Gladstone 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 Gladstone 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 * 0.4497

0.528 * 1

0.404 * 1.0069

0.892 * 2.8332

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.4159

4.679 * 0.167665

0.327 * 0.9218

-0.44

* 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 $10.34 Mil.
Revenue was 24.593 + 17.255 + 16.298 + 15.828 = $73.97 Mil.
Gross Profit was 24.593 + 17.255 + 16.298 + 15.828 = $73.97 Mil.
Total Current Assets was $11.84 Mil.
Total Assets was $766.56 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 $3.44 Mil.
Total Current Liabilities was $93.96 Mil.
Long-Term Debt & Capital Lease Obligation was $253.36 Mil.
Net Income was 20.001 + 13.1 + 11.884 + 11.986 = $56.97 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was -26.171 + 22.87 + -21.414 + -46.839 = $-71.55 Mil.

Total Receivables was $8.12 Mil.
Revenue was 9.245 + 8.236 + -2.842 + 11.471 = $26.11 Mil.
Gross Profit was 9.245 + 8.236 + -2.842 + 11.471 = $26.11 Mil.
Total Current Assets was $14.22 Mil.
Total Assets was $639.60 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 $2.92 Mil.
Total Current Liabilities was $116.71 Mil.
Long-Term Debt & Capital Lease Obligation was $197.66 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)
	=	(10.342 / 73.974)	/	(8.117 / 26.11)
	=	0.139806	/	0.310877
	=	0.4497

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)
	=	(26.11 / 26.11)	/	(73.974 / 73.974)
	=	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 - (11.84 + 0) / 766.557)	/	(1 - (14.219 + 0) / 639.603)
	=	0.984554	/	0.977769
	=	1.0069

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
	=	73.974	/	26.11
	=	2.8332

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)
	=	(3.436 / 73.974)	/	(2.916 / 26.11)
	=	0.046449	/	0.111681
	=	0.4159

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)
	=	((253.359 + 93.955) / 766.557)	/	((197.664 + 116.706) / 639.603)
	=	0.453083	/	0.491508
	=	0.9218

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
	=	(56.971 - 0	-	-71.554)	/	766.557
	=	0.167665

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.

Gladstone Capital has a M-score of -0.44 signals that the company is likely to be a manipulator.

Gladstone Capital Beneish M-Score Related Terms

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Gladstone Capital (Gladstone Capital) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Gladstone Capital Corp (NAS:GLAD) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

1G7:Germany

Address

1521 Westbranch Drive, Suite 100, McLean, VA, USA, 22102

Website

https://www.gladstonecapital.com

Gladstone Capital Corp is an externally managed, closed-end, non-diversified management investment company. Its investment objectives are to, achieve and grow current income by investing in debt securities of established businesses that would provide stable earnings and cash flow to pay expenses, make principal and interest payments on its outstanding indebtedness and make distributions to stockholders that grow over time; and provide its stockholders with long-term capital appreciation in the value of its assets by investing in equity securities of established businesses that can grow over time to permit it to sell its equity investments for capital gains.

Executives

Paula Novara	director	1521 WESTBRANCH DRIVE, SUITE 100, MCLEAN VA 22102
Schaltenbrand Nicole Frances Dubas	officer: CFO and Treasurer	1521 WESTBRANCH DRIVE, SUITE 100, MCLEAN VA 22102
Michael Licalsi	other: Affiliate of External Adviser	1521 WESTBRANCH DR., MCLEAN VA 22102
Robert L Marcotte	officer: President	1100 WILSON BOULEVARD, SUITE 3000, ARLINGTON VA 22209
David Gladstone	director, officer: CEO	1521 WESTBRANCH DRIVE, SUITE 200, MCLEAN VA 22102
Caren D Merrick	director	1521 WESTBRANCH, SUITE 100, MCLEAN VA 22102
Walter H Wilkinson	director	C/O RF MICRO DEVICES, INC., 7628 THORNDIKE ROAD, GREENSBORO NC 27409
Terry Lee Brubaker	director, officer: COO	C/O GLADSTONE CAPITAL CORP, 1521 WESTBRANCH DRIVE SUITE 200, MCLEAN VA 22102
John Dellafiora	officer: Chief Compliance Officer	1521 WESTBRANCH DRIVE, SUITE 200, MCLEAN VA 22102
Melissa Morrison	officer: Chief Accounting Officer	1521 WESTBRANCH DRIVE, SUITE 200, MCLEAN VA 22102
Jennifer A Smith	officer: Valuation Officer	1521 WESTBRANCH DRIVE, SUITE 100, MCLEAN VA 22102
Michela A English	director	C/O GLADSTONE CAPITAL CORP, 1521 WESTBRANCH DRIVE SUITE 200, MCLEAN VA 22102
Anthony W Parker	director	C/O GLADSTONE CAPITAL CORP, 1521 WESTBRANCH DRIVE SUITE 200, MCLEAN VA 22102
Terry Earhart	director	1521 WESTBRANCH DRIVE, SUITE 200, MCLEAN VA 22102
Paul W Adelgren	director	C/O GLADSTONE CAPITAL CORP, 1521 WESTBRANCH DRIVE SUITE 200, MCLEAN VA 22102