U&I Financial (U&I Financial) Beneish M-Score : -2.45 (As of May. 20, 2024)

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What is U&I Financial 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 -2.45 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for U&I Financial's Beneish M-Score or its related term are showing as below:

UNIF' s Beneish M-Score Range Over the Past 10 Years
Min: -3.15 Med: -2.38 Max: -1.7
Current: -2.45

During the past 8 years, the highest Beneish M-Score of U&I Financial was -1.70. The lowest was -3.15. And the median was -2.38.

U&I Financial 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 U&I Financial 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 * 1.3692

0.528 * 1

0.404 * 1.0014

0.892 * 0.9447

0.115 * 0.8907

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0334

4.679 * -0.061639

0.327 * 0.8664

-2.45

* 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 $2.27 Mil.
Revenue was $25.15 Mil.
Gross Profit was $25.15 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $610.05 Mil.
Property, Plant and Equipment(Net PPE) was $6.44 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.61 Mil.
Selling, General, & Admin. Expense(SGA) was $8.51 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $21.09 Mil.
Net Income was $-10.81 Mil.
Gross Profit was $0.00 Mil.
Cash Flow from Operations was $26.80 Mil.

Total Receivables was $1.76 Mil.
Revenue was $26.62 Mil.
Gross Profit was $26.62 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $586.73 Mil.
Property, Plant and Equipment(Net PPE) was $6.98 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.59 Mil.
Selling, General, & Admin. Expense(SGA) was $8.72 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $23.41 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)
	=	(2.27 / 25.149)	/	(1.755 / 26.621)
	=	0.090262	/	0.065925
	=	1.3692

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)
	=	(26.621 / 26.621)	/	(25.149 / 25.149)
	=	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 + 6.439) / 610.049)	/	(1 - (0 + 6.982) / 586.73)
	=	0.989445	/	0.9881
	=	1.0014

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
	=	25.149	/	26.621
	=	0.9447

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))
	=	(0.585 / (0.585 + 6.982))	/	(0.612 / (0.612 + 6.439))
	=	0.077309	/	0.086796
	=	0.8907

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)
	=	(8.509 / 25.149)	/	(8.716 / 26.621)
	=	0.338343	/	0.327411
	=	1.0334

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)
	=	((21.086 + 0) / 610.049)	/	((23.406 + 0) / 586.73)
	=	0.034564	/	0.039892
	=	0.8664

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
	=	(-10.808 - 0	-	26.795)	/	610.049
	=	-0.061639

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.

U&I Financial has a M-score of -2.45 suggests that the company is unlikely to be a manipulator.

U&I Financial Beneish M-Score Related Terms

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U&I Financial (U&I Financial) Business Description

Industry

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Traded in Other Exchanges

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Address

19315 Highway 99, Lynnwood, WA, USA, 98036

Website

https://www.unibankusa.com

U&I Financial Corp is a bank holding company based in United States. The company, through its subsidiary, offers services of a community bank. The bank's operations include commercial banking services, such as lending activities, deposit products, and other cash management services.