Fidus Investment (FRA:8QP) Beneish M-Score : -1.50 (As of May. 27, 2024)

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What is Fidus Investment 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 -1.5 higher than -1.78, which implies that the company might have manipulated its financial results.

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

FRA:8QP' s Beneish M-Score Range Over the Past 10 Years
Min: -2.59 Med: -1.65 Max: 13.08
Current: -1.5

During the past 13 years, the highest Beneish M-Score of Fidus Investment was 13.08. The lowest was -2.59. And the median was -1.65.

Fidus Investment 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 Fidus Investment 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 * 0.7394

0.528 * 1

0.404 * 1

0.892 * 1.5269

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.7231

4.679 * 0.13529

0.327 * 0.9037

-1.54

* 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 (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was €14.45 Mil.
Revenue was 20.918 + 27.299 + 24.619 + 13.341 = €86.18 Mil.
Gross Profit was 20.918 + 27.299 + 24.619 + 13.341 = €86.18 Mil.
Total Current Assets was €0.00 Mil.
Total Assets was €1,005.32 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 €5.97 Mil.
Total Current Liabilities was €0.00 Mil.
Long-Term Debt & Capital Lease Obligation was €418.43 Mil.
Net Income was 18.513 + 24.236 + 22.768 + 10.075 = €75.59 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0.00 Mil.
Cash Flow from Operations was -71.597 + 3.072 + 23.648 + -15.541 = €-60.42 Mil.

Total Receivables was €12.80 Mil.
Revenue was 16.344 + 17.51 + 13.176 + 9.41 = €56.44 Mil.
Gross Profit was 16.344 + 17.51 + 13.176 + 9.41 = €56.44 Mil.
Total Current Assets was €0.00 Mil.
Total Assets was €886.39 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 €5.41 Mil.
Total Current Liabilities was €0.00 Mil.
Long-Term Debt & Capital Lease Obligation was €408.24 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)
	=	(14.451 / 86.177)	/	(12.8 / 56.44)
	=	0.16769	/	0.22679
	=	0.7394

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)
	=	(56.44 / 56.44)	/	(86.177 / 86.177)
	=	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) / 1005.324)	/	(1 - (0 + 0) / 886.388)
	=	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
	=	86.177	/	56.44
	=	1.5269

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)
	=	(5.971 / 86.177)	/	(5.408 / 56.44)
	=	0.069288	/	0.095819
	=	0.7231

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)
	=	((418.431 + 0) / 1005.324)	/	((408.235 + 0) / 886.388)
	=	0.416215	/	0.46056
	=	0.9037

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
	=	(75.592 - 0	-	-60.418)	/	1005.324
	=	0.13529

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.

Fidus Investment has a M-score of -1.54 signals that the company is likely to be a manipulator.

Fidus Investment Beneish M-Score Related Terms

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Fidus Investment (FRA:8QP) Business Description

Industry

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FDUS:USA

Address

1603 Orrington Avenue, Suite 1005, Evanston, IL, USA, 60201

Website

https://www.fdus.com

Fidus Investment Corp is an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company. The company provides customized debt and equity financing solutions to lower middle-market companies, which management generally defines as U.S. based companies with revenues between $10 million and $150 million. The company invests in companies that possess some or all of the following attributes: predictable revenues; positive cash flows; defensible market positions; diversified customer and supplier bases; and management teams with operating discipline.