University Bancorp (University Bancorp) Beneish M-Score

: -1.66 (As of Today)

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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 -1.66 higher than -1.78, which implies that the company might have manipulated its financial results.

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

UNIB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.94 Med: -2.31 Max: -1.13
Current: -1.66

During the past 13 years, the highest Beneish M-Score of University Bancorp was -1.13. The lowest was -3.94. And the median was -2.31.

University 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 University 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 * 2.714

0.528 * 1

0.404 * 1.1276

0.892 * 0.6761

0.115 * 0.8684

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.2086

4.679 * -0.058638

0.327 * 1.5842

-1.66

* 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 (Dec22) TTM:

Last Year (Dec21) TTM:

Total Receivables was $10.39 Mil.
Revenue was $86.42 Mil.
Gross Profit was $86.42 Mil.
Total Current Assets was $96.13 Mil.
Total Assets was $794.24 Mil.
Property, Plant and Equipment(Net PPE) was $12.05 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.90 Mil.
Selling, General, & Admin. Expense(SGA) was $61.59 Mil.
Total Current Liabilities was $10.51 Mil.
Long-Term Debt & Capital Lease Obligation was $81.76 Mil.
Net Income was $3.79 Mil.
Gross Profit was $0.00 Mil.
Cash Flow from Operations was $50.36 Mil.

Total Receivables was $5.67 Mil.
Revenue was $127.84 Mil.
Gross Profit was $127.84 Mil.
Total Current Assets was $102.88 Mil.
Total Assets was $500.38 Mil.
Property, Plant and Equipment(Net PPE) was $14.20 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.90 Mil.
Selling, General, & Admin. Expense(SGA) was $75.38 Mil.
Total Current Liabilities was $13.97 Mil.
Long-Term Debt & Capital Lease Obligation was $22.72 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)
	=	(10.394 / 86.423)	/	(5.665 / 127.835)
	=	0.120269	/	0.044315
	=	2.714

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)
	=	(127.835 / 127.835)	/	(86.423 / 86.423)
	=	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 - (96.129 + 12.051) / 794.235)	/	(1 - (102.876 + 14.202) / 500.384)
	=	0.863793	/	0.766024
	=	1.1276

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
	=	86.423	/	127.835
	=	0.6761

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))
	=	(1.9 / (1.9 + 14.202))	/	(1.895 / (1.895 + 12.051))
	=	0.117998	/	0.135881
	=	0.8684

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)
	=	(61.593 / 86.423)	/	(75.384 / 127.835)
	=	0.712692	/	0.589698
	=	1.2086

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)
	=	((81.757 + 10.505) / 794.235)	/	((22.717 + 13.974) / 500.384)
	=	0.116165	/	0.073326
	=	1.5842

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
	=	(3.789 - 0	-	50.361)	/	794.235
	=	-0.058638

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.

University Bancorp has a M-score of -1.66 signals that the company is likely to be a manipulator.

University Bancorp Beneish M-Score Related Terms

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University Bancorp (University Bancorp) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » University Bancorp Inc (OTCPK:UNIB) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

2015 Washtenaw Avenue, Ann Arbor, MI, USA, 48104

Website

https://www.university-bank.com

University Bancorp Inc is a holding company of University Bank (the Bank). It is a full-service community bank, which offers all customary banking services, including the acceptance of checking, savings and time deposits. The bank also makes commercial, real estate, personal, home improvement, automotive and another installment, credit card, and consumer loans, and provides fee-based services such as foreign currency exchange. The company's customer base is primarily located in the Ann Arbor, Michigan metropolitan statistical area. Its segments include The Bank & Midwest (community banking & servicing), ULG (mortgage banking), and UIF (faith-based lending).

Executives

Nicholas K Fortson	officer: CFO	959 MAIDEN LANE, ANN ARBOR MI 48105
Jove Corp	other: Affiliate of majority owner	3220 COOLIDGE HWY, BERKLEY MI 48072
Joseph Lange Ranzini	director, 10 percent owner	959 MAIDEN LANE, ANN ARBOR MI 48105
Stephen Lange Ranzini	director, 10 percent owner, officer: President & CEO	959 MAIDEN LANE, ANN ARBOR MI 48105
Mildred Lange Ranzini	10 percent owner	43 SWEETWATER, BELLE MEAD NJ 08502