First Federal of Northern Michigan Bancorp (First Federal of Northern Michigan Bancorp) Beneish M-Score : 0.00 (As of Apr. 26, 2024)

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What is First Federal of Northern Michigan Bancorp 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.

The historical rank and industry rank for First Federal of Northern Michigan Bancorp's Beneish M-Score or its related term are showing as below:

During the past 13 years, the highest Beneish M-Score of First Federal of Northern Michigan Bancorp was 0.00. The lowest was 0.00. And the median was 0.00.

First Federal of Northern Michigan Bancorp 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 First Federal of Northern Michigan Bancorp 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 * 1.0402

0.528 * 1

0.404 * 1.0016

0.892 * 1.05

0.115 * 1.64

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9302

4.679 * 0.00551

0.327 * 0.7619

-2.21

* 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 (Sep17) TTM:

Last Year (Sep16) TTM:

Total Receivables was $1.10 Mil.
Revenue was 3.029 + 3.026 + 2.882 + 2.894 = $11.83 Mil.
Gross Profit was 3.029 + 3.026 + 2.882 + 2.894 = $11.83 Mil.
Total Current Assets was $16.08 Mil.
Total Assets was $336.29 Mil.
Property, Plant and Equipment(Net PPE) was $5.66 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.20 Mil.
Selling, General, & Admin. Expense(SGA) was $6.75 Mil.
Total Current Liabilities was $18.81 Mil.
Long-Term Debt & Capital Lease Obligation was $0.29 Mil.
Net Income was 0.396 + 0.521 + 0.39 + 0.546 = $1.85 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 0 = $0.00 Mil.

Total Receivables was $1.01 Mil.
Revenue was 2.867 + 2.687 + 2.807 + 2.907 = $11.27 Mil.
Gross Profit was 2.867 + 2.687 + 2.807 + 2.907 = $11.27 Mil.
Total Current Assets was $15.85 Mil.
Total Assets was $329.81 Mil.
Property, Plant and Equipment(Net PPE) was $5.96 Mil.
Depreciation, Depletion and Amortization(DDA) was $0.35 Mil.
Selling, General, & Admin. Expense(SGA) was $6.91 Mil.
Total Current Liabilities was $1.41 Mil.
Long-Term Debt & Capital Lease Obligation was $23.17 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)
	=	(1.102 / 11.831)	/	(1.009 / 11.268)
	=	0.093145	/	0.089546
	=	1.0402

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)
	=	(11.268 / 11.268)	/	(11.831 / 11.831)
	=	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 - (16.081 + 5.66) / 336.288)	/	(1 - (15.845 + 5.964) / 329.811)
	=	0.93535	/	0.933874
	=	1.0016

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
	=	11.831	/	11.268
	=	1.05

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))
	=	(0.35 / (0.35 + 5.964))	/	(0.198 / (0.198 + 5.66))
	=	0.055432	/	0.0338
	=	1.64

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)
	=	(6.746 / 11.831)	/	(6.907 / 11.268)
	=	0.570197	/	0.612975
	=	0.9302

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)
	=	((0.289 + 18.809) / 336.288)	/	((23.174 + 1.411) / 329.811)
	=	0.056791	/	0.074543
	=	0.7619

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
	=	(1.853 - 0	-	0)	/	336.288
	=	0.00551

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.

First Federal of Northern Michigan Bancorp has a M-score of -2.21 suggests that the company is unlikely to be a manipulator.

First Federal of Northern Michigan Bancorp Beneish M-Score Related Terms

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First Federal of Northern Michigan Bancorp (First Federal of Northern Michigan Bancorp) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » First Federal of Northern Michigan Bancorp Inc (OTCPK:FFNM) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.first-federal.com

First Federal of Northern Michigan Bancorp Inc operates as a full-service, community-oriented savings bank whose primary lending activity is the origination of one- to four-family residential real estate mortgages, commercial real estate loans, commercial loans, and consumer loans. Its primary services include accepting deposits, making a commercial, consumer and mortgage loans, and engaging in mortgage banking activities. Geographically all the operation of the group is functioned through the region of US.

Executives

Martin A Thomson

director