UMB Financial (FRA:UMB) Beneish M-Score

: -2.22 (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.

Good Sign:

Beneish M-Score -2.22 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

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

FRA:UMB' s Beneish M-Score Range Over the Past 10 Years
Min: -4.05 Med: -2.42 Max: -1.3
Current: -2.22

During the past 13 years, the highest Beneish M-Score of UMB Financial was -1.30. The lowest was -4.05. And the median was -2.42.

UMB 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 UMB 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 * 1.0051

0.528 * 1

0.404 * 1.5509

0.892 * 1.2719

0.115 * 0.9646

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.926

4.679 * -0.008926

0.327 * 1.3211

-2.15

* 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 €465 Mil.
Revenue was 320.723 + 338.104 + 355.609 + 280.593 = €1,295 Mil.
Gross Profit was 320.723 + 338.104 + 355.609 + 280.593 = €1,295 Mil.
Total Current Assets was €8,665 Mil.
Total Assets was €36,356 Mil.
Property, Plant and Equipment(Net PPE) was €249 Mil.
Depreciation, Depletion and Amortization(DDA) was €51 Mil.
Selling, General, & Admin. Expense(SGA) was €552 Mil.
Total Current Liabilities was €226 Mil.
Long-Term Debt & Capital Lease Obligation was €360 Mil.
Net Income was 94.563 + 88.87 + 130.128 + 96.214 = €410 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = €0 Mil.
Cash Flow from Operations was 136.356 + 221.493 + 198.43 + 178.015 = €734 Mil.

Total Receivables was €364 Mil.
Revenue was 270.283 + 251.868 + 258.653 + 237.417 = €1,018 Mil.
Gross Profit was 270.283 + 251.868 + 258.653 + 237.417 = €1,018 Mil.
Total Current Assets was €19,154 Mil.
Total Assets was €37,784 Mil.
Property, Plant and Equipment(Net PPE) was €240 Mil.
Depreciation, Depletion and Amortization(DDA) was €47 Mil.
Selling, General, & Admin. Expense(SGA) was €468 Mil.
Total Current Liabilities was €221 Mil.
Long-Term Debt & Capital Lease Obligation was €240 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)
	=	(465.216 / 1295.028)	/	(363.908 / 1018.22)
	=	0.359233	/	0.357396
	=	1.0051

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)
	=	(1018.22 / 1018.22)	/	(1295.028 / 1295.028)
	=	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 - (8664.927 + 248.885) / 36355.763)	/	(1 - (19154.441 + 239.776) / 37783.733)
	=	0.754817	/	0.486705
	=	1.5509

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
	=	1295.028	/	1018.22
	=	1.2719

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))
	=	(47.461 / (47.461 + 239.776))	/	(51.444 / (51.444 + 248.885))
	=	0.165234	/	0.171293
	=	0.9646

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)
	=	(551.744 / 1295.028)	/	(468.495 / 1018.22)
	=	0.426048	/	0.460111
	=	0.926

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)
	=	((359.958 + 226.205) / 36355.763)	/	((240.316 + 220.8) / 37783.733)
	=	0.016123	/	0.012204
	=	1.3211

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
	=	(409.776 - 0	-	734.294)	/	36355.763
	=	-0.008926

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.

UMB Financial has a M-score of -2.15 suggests that the company is unlikely to be a manipulator.

UMB Financial Beneish M-Score Related Terms

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UMB Financial (FRA:UMB) Business Description

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UMBF:USA

Address

1010 Grand Boulevard, Kansas City, MO, USA, 64106

Website

https://www.umb.com

UMB Financial Corp, or UMBF, is a financial services holding company offering a suite of banking, asset management, and health spending solutions. Its customer base includes commercial, institutional, and personal customers across the United States. The company's banking subsidiaries own and operate banking and wealth-management centres mostly throughout the Midwest and Southwest regions of the U.S. Subsidiaries of the holding company and its lead bank, UMB Bank, include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisory. The bank's revenue is split nearly evenly between interest income and noninterest income.