GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Sotherly Hotels Inc (NAS:SOHO) » Definitions » Beneish M-Score

Sotherly Hotels (Sotherly Hotels) Beneish M-Score : -2.65 (As of May. 06, 2024)


View and export this data going back to 2004. Start your Free Trial

What is Sotherly Hotels 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 -2.65 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

SOHO' s Beneish M-Score Range Over the Past 10 Years
Min: -7.05   Med: -2.55   Max: -0.77
Current: -2.65

During the past 13 years, the highest Beneish M-Score of Sotherly Hotels was -0.77. The lowest was -7.05. And the median was -2.55.


Sotherly Hotels Beneish M-Score Historical Data

The historical data trend for Sotherly Hotels'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.

* Premium members only.

Sotherly Hotels Beneish M-Score Chart

Sotherly Hotels Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Beneish M-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only -2.92 -7.05 -2.36 -2.33 -2.65

Sotherly Hotels Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Beneish M-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.33 -2.44 -2.41 -2.46 -2.65

Competitive Comparison of Sotherly Hotels's Beneish M-Score

For the REIT - Hotel & Motel subindustry, Sotherly Hotels'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.


Sotherly Hotels's Beneish M-Score Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Sotherly Hotels's Beneish M-Score distribution charts can be found below:

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



Sotherly Hotels 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 Sotherly Hotels 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 * 0.9719+0.528 * 1.0859+0.404 * 1.0046+0.892 * 1.0467+0.115 * 1
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0214+4.679 * -0.047857-0.327 * 1.0044
=-2.65

* 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 $5.9 Mil.
Revenue was 42.148 + 39.181 + 49.017 + 43.491 = $173.8 Mil.
Gross Profit was 10.3 + 7.567 + 14.842 + 12.079 = $44.8 Mil.
Total Current Assets was $38.5 Mil.
Total Assets was $393.4 Mil.
Property, Plant and Equipment(Net PPE) was $0.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.8 Mil.
Selling, General, & Admin. Expense(SGA) was $7.1 Mil.
Total Current Liabilities was $25.4 Mil.
Long-Term Debt & Capital Lease Obligation was $317.5 Mil.
Net Income was -0.689 + -1.909 + 5.127 + 1.412 = $3.9 Mil.
Non Operating Income was -0.19 + 0.66 + 1.05 + -0.15 = $1.4 Mil.
Cash Flow from Operations was 2.912 + 4.655 + 3.865 + 9.968 = $21.4 Mil.
Total Receivables was $5.8 Mil.
Revenue was 41.342 + 39.213 + 47.17 + 38.353 = $166.1 Mil.
Gross Profit was 11.893 + 9.823 + 14.772 + 9.975 = $46.5 Mil.
Total Current Assets was $41.5 Mil.
Total Assets was $406.6 Mil.
Property, Plant and Equipment(Net PPE) was $0.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $18.7 Mil.
Selling, General, & Admin. Expense(SGA) was $6.6 Mil.
Total Current Liabilities was $29.8 Mil.
Long-Term Debt & Capital Lease Obligation was $323.0 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)
=(5.946 / 173.837) / (5.845 / 166.078)
=0.034204 / 0.035194
=0.9719

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)
=(46.463 / 166.078) / (44.788 / 173.837)
=0.279766 / 0.257644
=1.0859

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 - (38.524 + 0) / 393.443) / (1 - (41.498 + 0) / 406.569)
=0.902085 / 0.897931
=1.0046

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
=173.837 / 166.078
=1.0467

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))
=(18.651 / (18.651 + 0)) / (18.788 / (18.788 + 0))
=1 / 1
=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)
=(7.079 / 173.837) / (6.621 / 166.078)
=0.040722 / 0.039867
=1.0214

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)
=((317.526 + 25.404) / 393.443) / ((323.028 + 29.787) / 406.569)
=0.871613 / 0.867786
=1.0044

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
=(3.941 - 1.37 - 21.4) / 393.443
=-0.047857

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.

Sotherly Hotels has a M-score of -2.65 suggests that the company is unlikely to be a manipulator.


Sotherly Hotels Beneish M-Score Related Terms

Thank you for viewing the detailed overview of Sotherly Hotels's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.


Sotherly Hotels (Sotherly Hotels) Business Description

Address
306 South Henry Street, Suite 100, Williamsburg, VA, USA, 23185
Sotherly Hotels Inc is engaged in Hotel operations. The company is a self-managed and self-administered lodging real estate investment trust that was formed to own, acquire, renovate, and reposition full-service, upscale, and upper-upscale hotel properties located in primary markets in the mid-Atlantic and southern United States. It generates revenue through the rooms, food, beverage, and other services. Geographically, the group has its presence in the regions of Florida, Georgia, Indiana, Maryland, North Carolina, Pennsylvania, Texas, and Virginia.
Executives
Andrew Sims director, officer: Chief Executive Officer 410 W. FRANCIS STREET, WILLIAMSBURG VA 23185
Scott M Kucinski officer: EVP & Chief Operating Officer 306 S. HENRY STREET, SUITE 100, WILLIAMSBURG VA 23185
David R Folsom officer: Chief Operating Officer 410 W. FRANCIS STREET, WILLIAMSBURG VA 23185
Maria L Caldwell director 410 W FRANCIS ST, WILLIAMSBURG VA 23185
Gibson George S Iv director 410 W FRANCIS ST, WILLIAMSBURG VA 23185
Anthony E Domalski officer: Chief Accounting Officer 6411 IVY LANE, SUITE 510, GREENBELT MD 20770
Herschel J Walker director 410 W FRANCIS ST, WILLIAMSBURG VA 23185
Kim Sims director 6411 IVY LANE, SUITE 510, GREENBELT MD 20770
Richmond Hill Investment Co., Lp other: Member of Group Owning 10% 381 PARK AVENUE SOUTH, SUITE 1101, NEW YORK NY 10016
Richmond Hill Advisors, Llc other: Member of Group Owning 10% 375 HUDSON STREET, 12TH FLOOR, NEW YORK NY 10014
Essex Illiquid, Llc 10 percent owner, other: Member of Group Owning 10% 375 HUDSON STREET, NEW YORK NY 10014
Richmond Hill Capital Partners, Lp other: Member of Group Owning 10% 375 HUDSON STREET, 12TH FLOOR, NEW YORK NY 10014
Basil Maher 10 percent owner, other: Member of Group Owning 10% C/O ESSEX EQUITY CAPITAL MANAGEMENT, LLC, 70 S. ORANGE AVENUE, SUITE 105, LIVINGSTON NJ 07039
M. Brian Maher 10 percent owner, other: Member of Group Owning 10% C/O ESSEX EQUITY CAPITAL MANAGEMENT, LLC, 70 S. ORANGE AVENUE, SUITE 105, LIVINGSTON NJ 07039
Richmond Hill Investments, Llc 10 percent owner, other: Member of Group Owning 10% 381 PARK AVENUE SOUTH, SUITE 1101, NEW YORK NY 10016

Sotherly Hotels (Sotherly Hotels) Headlines