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Universal Forest Products Inc (NAS:UFPI)
Beneish M-Score
-2.64 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Universal Forest Products Inc has a M-score of -2.64 suggests that the company is not a manipulator.

UFPI' s 10-Year Beneish M-Score Range
Min: -3.61   Max: 0.43
Current: -2.64

-3.61
0.43

During the past 13 years, the highest Beneish M-Score of Universal Forest Products Inc was 0.43. The lowest was -3.61. And the median was -2.49.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Universal Forest Products Inc 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 * 1.0007+0.528 * 0.8706+0.404 * 0.9215+0.892 * 1.0623+0.115 * 0.9671
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0532+4.679 * -0.0199-0.327 * 1.0249
=-2.64

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $257 Mil.
Revenue was 713.489 + 772.752 + 553.998 + 525.737 = $2,566 Mil.
Gross Profit was 89.586 + 96.988 + 66.012 + 64.868 = $317 Mil.
Total Current Assets was $585 Mil.
Total Assets was $1,015 Mil.
Property, Plant and Equipment(Net PPE) was $245 Mil.
Depreciation, Depletion and Amortization(DDA) was $35 Mil.
Selling, General & Admin. Expense(SGA) was $223 Mil.
Total Current Liabilities was $193 Mil.
Long-Term Debt was $85 Mil.
Net Income was 19.234 + 21.789 + 7.216 + 7.995 = $56 Mil.
Non Operating Income was 0.118 + 0.078 + 0.051 + 0.049 = $0 Mil.
Cash Flow from Operations was 47.724 + 77.536 + -54.732 + 5.623 = $76 Mil.
Accounts Receivable was $242 Mil.
Revenue was 651.78 + 738.436 + 554.494 + 470.763 = $2,415 Mil.
Gross Profit was 78.289 + 80.216 + 57.179 + 44.469 = $260 Mil.
Total Current Assets was $510 Mil.
Total Assets was $934 Mil.
Property, Plant and Equipment(Net PPE) was $239 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $199 Mil.
Total Current Liabilities was $164 Mil.
Long-Term Debt was $85 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(257.235 / 2565.976) / (241.99 / 2415.473)
=0.1002484 / 0.10018328
=1.0007

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)
=(96.988 / 2415.473) / (89.586 / 2565.976)
=0.10770271 / 0.12371667
=0.8706

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (585.395 + 245.036) / 1015.483) / (1 - (509.554 + 239.347) / 933.513)
=0.18223052 / 0.1977605
=0.9215

4. SGI = Sales Growth Index

Ratio of sales 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
=2565.976 / 2415.473
=1.0623

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(33.22 / (33.22 + 239.347)) / (35.335 / (35.335 + 245.036))
=0.12187829 / 0.12602944
=0.9671

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(222.875 / 2565.976) / (199.199 / 2415.473)
=0.08685779 / 0.08246791
=1.0532

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$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((84.7 + 192.941) / 1015.483) / ((84.7 + 164.34) / 933.513)
=0.27340783 / 0.26677722
=1.0249

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
=(56.234 - 0.296 - 76.151) / 1015.483
=-0.0199

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Universal Forest Products Inc has a M-score of -2.64 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Universal Forest Products Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.85361.11120.80911.01961.09011.0381.04461.07451.10250.9196
GMI 1.12510.90470.93181.16491.07990.78481.19311.10961.00050.9646
AQI 0.90710.93661.19980.92531.20960.97751.03891.02610.90120.9237
SGI 1.2921.09710.990.94320.88830.74941.13020.96381.12761.2022
DEPI 0.91310.92930.98480.92230.91931.05841.05571.03361.06231.0583
SGAI 0.87561.06681.10841.04771.00691.16780.87410.95230.90420.9194
LVGI 0.95530.97350.84020.97090.75330.82170.92990.85781.28940.9974
TATA -0.0058-0.0091-0.0907-0.0534-0.1032-0.1315-0.0151-0.00880.0344-0.0114
M-score -2.33-2.42-3.01-2.71-2.78-3.37-2.22-2.36-2.22-2.46

Universal Forest Products Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.95750.97451.10251.06431.08021.05130.91960.90690.96961.0007
GMI 0.94740.98121.00051.05471.13331.05520.96460.90660.84430.8706
AQI 0.99940.97720.90120.89580.88630.89550.92370.9310.92720.9215
SGI 1.08441.12771.12761.13751.1831.2041.20221.14761.09021.0623
DEPI 1.03511.05191.06231.0881.10161.11091.05831.02671.01390.9671
SGAI 0.90990.89620.90420.91180.87710.89140.91940.9771.03511.0532
LVGI 0.9561.01731.28941.25461.2651.19910.99740.94390.93231.0249
TATA -0.0280.01460.03440.05230.0389-0.0067-0.0114-0.0182-0.053-0.0199
M-score -2.57-2.32-2.22-2.12-2.09-2.33-2.46-2.57-2.77-2.64
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