WhiteHorse Finance (WhiteHorse Finance) Beneish M-Score : -2.82 (As of Apr. 26, 2024)

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What is WhiteHorse Finance 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 -2.82 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

WHF' s Beneish M-Score Range Over the Past 10 Years
Min: -2.82 Med: -1.77 Max: 43.74
Current: -2.82

During the past 12 years, the highest Beneish M-Score of WhiteHorse Finance was 43.74. The lowest was -2.82. And the median was -1.77.

WhiteHorse Finance 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 WhiteHorse Finance 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 * 0.872

0.528 * 1

0.404 * 0.9957

0.892 * 1.2027

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.7704

4.679 * -0.095733

0.327 * 0.9731

-2.82

* 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 $8.49 Mil.
Revenue was 4.712 + 6.719 + 5.197 + 9.054 = $25.68 Mil.
Gross Profit was 4.712 + 6.719 + 5.197 + 9.054 = $25.68 Mil.
Total Current Assets was $19.24 Mil.
Total Assets was $730.75 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 $4.31 Mil.
Total Current Liabilities was $27.17 Mil.
Long-Term Debt & Capital Lease Obligation was $386.45 Mil.
Net Income was 3.426 + 5.599 + 3.881 + 7.506 = $20.41 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 15.801 + 42.288 + 10.518 + 21.762 = $90.37 Mil.

Total Receivables was $8.10 Mil.
Revenue was 0.427 + 5.095 + 8.782 + 7.049 = $21.35 Mil.
Gross Profit was 0.427 + 5.095 + 8.782 + 7.049 = $21.35 Mil.
Total Current Assets was $17.61 Mil.
Total Assets was $796.47 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 $4.65 Mil.
Total Current Liabilities was $22.83 Mil.
Long-Term Debt & Capital Lease Obligation was $440.43 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)
	=	(8.492 / 25.682)	/	(8.097 / 21.353)
	=	0.33066	/	0.379197
	=	0.872

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)
	=	(21.353 / 21.353)	/	(25.682 / 25.682)
	=	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 - (19.241 + 0) / 730.751)	/	(1 - (17.605 + 0) / 796.474)
	=	0.97367	/	0.977896
	=	0.9957

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
	=	25.682	/	21.353
	=	1.2027

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)
	=	(4.305 / 25.682)	/	(4.646 / 21.353)
	=	0.167627	/	0.217581
	=	0.7704

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)
	=	((386.448 + 27.172) / 730.751)	/	((440.427 + 22.832) / 796.474)
	=	0.56602	/	0.581637
	=	0.9731

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
	=	(20.412 - 0	-	90.369)	/	730.751
	=	-0.095733

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.

WhiteHorse Finance has a M-score of -2.82 suggests that the company is unlikely to be a manipulator.

WhiteHorse Finance Beneish M-Score Related Terms

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WhiteHorse Finance (WhiteHorse Finance) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » WhiteHorse Finance Inc (NAS:WHF) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

M9X:Germany

Address

1450 Brickell Avenue, 31st Floor, Miami, FL, USA, 33131

Website

https://www.whitehorsefinance.com

WhiteHorse Finance Inc is a non-diversified, closed-end management investment company. It makes debt investments in privately held; small-cap companies located in United States. Its investment objective is to generate attractive risk-adjusted returns for investors, primarily by originating senior secured loans to privately held small-cap companies across a broad range of industries.

Executives

John Bolduc	director	1450 BRICKELL AVENUE, 31ST FLOOR, MIAMI FL 33131
Marco A. Collazos	officer: Chief Compliance Officer	1450 BRICKELL AVENUE, 31ST FLOOR, MIAMI FL 33131
Stuart D Aronson	director, officer: Chief Executive Officer	C/O WHITEHORSE FINANCE, INC., 1450 BRICKELL AVENUE, 31ST FLOOR, MIAMI FL 33131
Joyson Thomas	officer: Chief Financial Officer	C/O WHITEHORSE FINANCE, INC., 1450 BRICKELL AVENUE, 31ST FLOOR, MIAMI FL 33131
G Stacy Smith	director	300 CRESCENT COURT SUITE 1111, DALLAS TX 75201
Rick Patrick Frier	director	11808 PLEASANT WYATT PLACE, CHARLOTTE NC 28277
Anthony Tamer	10 percent owner	1001 SOUTH BAYSHORE DRIVE, STE 2708, MIAMI FL 33131
Sami Mnaymneh	10 percent owner	1001 SOUTH BAYSHORE DRIVE, STE 2708, MIAMI FL 33131
Kevin Francis Burke	director	C/O WHITEHORSE FINANCE, INC., 1450 BRICKELL AVENUE, 31ST FLOOR, MIAMI FL 33131
Rick D Puckett	director	440 S. CHURCH STREET, SUITE 700, CHARLOTTE NC 28202
Edward J. Giordano	officer: Chief Financial Officer	C/O H.I.G. CAPITAL, LLC, 1450 BRICKELL AVENUE, 31ST FLOOR, MIAMI FL 33131
Gerhard Lombard	officer: Chief Financial Officer	600 FIFTH AVENUE, 19TH FLOOR, NEW YORK NY 10020
Carvell James Demus Iii	director, officer: Chief Executive Officer	200 CRESCENT COURT, SUITE 1414, DALLAS TX 75201
Tom C Davis	director	DEAN FOODS COMPANY, 2515 MCKINNEY AVE STE 1200, DALLAS TX 75201
William D Markert	director, officer: CHIEF OPERATING OFFICER	EVP - NETWORK FINANCIAL MANAGEMENT, 1467 ASHBOURNE CIRCLE, SHAKOPEE MN 55379