United Development Funding IV (United Development Funding IV) Beneish M-Score : 0.00 (As of May. 16, 2024)

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What is United Development Funding IV 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 United Development Funding IV's Beneish M-Score or its related term are showing as below:

During the past 4 years, the highest Beneish M-Score of United Development Funding IV was 0.00. The lowest was 0.00. And the median was 0.00.

United Development Funding IV 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 United Development Funding IV 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 * 1.401

0.528 * 1

0.404 * 1

0.892 * 1.0537

0.115 * 1

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9387

4.679 * 0.017987

0.327 * 1.367

-2.09

* 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 (Sep15) TTM:

Last Year (Sep14) TTM:

Total Receivables was $36.03 Mil.
Revenue was 18.569 + 18.436 + 18.27 + 18.609 = $73.88 Mil.
Gross Profit was 18.569 + 18.436 + 18.27 + 18.609 = $73.88 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $684.06 Mil.
Property, Plant and Equipment(Net PPE) was $0.00 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.27 Mil.
Selling, General, & Admin. Expense(SGA) was $16.72 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $50.00 Mil.
Net Income was 14.314 + 14.301 + 14.261 + 13.573 = $56.45 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.00 Mil.
Cash Flow from Operations was 12.739 + 12.248 + 2.795 + 16.363 = $44.15 Mil.

Total Receivables was $24.40 Mil.
Revenue was 18.151 + 18.359 + 17.572 + 16.036 = $70.12 Mil.
Gross Profit was 18.151 + 18.359 + 17.572 + 16.036 = $70.12 Mil.
Total Current Assets was $0.00 Mil.
Total Assets was $654.56 Mil.
Property, Plant and Equipment(Net PPE) was $0.00 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.16 Mil.
Selling, General, & Admin. Expense(SGA) was $16.91 Mil.
Total Current Liabilities was $0.00 Mil.
Long-Term Debt & Capital Lease Obligation was $35.00 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)
	=	(36.026 / 73.884)	/	(24.404 / 70.118)
	=	0.487602	/	0.348042
	=	1.401

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)
	=	(70.118 / 70.118)	/	(73.884 / 73.884)
	=	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 + 0) / 684.059)	/	(1 - (0 + 0) / 654.563)
	=	1	/	1
	=	1

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
	=	73.884	/	70.118
	=	1.0537

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))
	=	(1.159 / (1.159 + 0))	/	(2.272 / (2.272 + 0))
	=	1	/	1
	=	1

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)
	=	(16.722 / 73.884)	/	(16.906 / 70.118)
	=	0.226328	/	0.241108
	=	0.9387

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)
	=	((50 + 0) / 684.059)	/	((35 + 0) / 654.563)
	=	0.073093	/	0.053471
	=	1.367

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
	=	(56.449 - 0	-	44.145)	/	684.059
	=	0.017987

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.

United Development Funding IV has a M-score of -2.09 suggests that the company is unlikely to be a manipulator.

United Development Funding IV Beneish M-Score Related Terms

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United Development Funding IV (United Development Funding IV) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » United Development Funding IV (OTCPK:UDFI) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

1301 Municipal Way, Suite 200, Grapevine, TX, USA, 76051

Website

http://www.udfonline.com

United Development Funding IV is a real estate investment trust. It invests in the development and construction of single-family homes through a family of public and private funds, which direct investor capital towards the financing of homebuilders and land developers. The company offers investors to diversify their portfolios with investments in affordable residential real estate. The vast majority of the company's loan portfolio is secured by parcels of land intended for development and finished lots. Nearly all of the company's property loans and investments are secured by or related to properties located in Texas.

Executives

Phillip Kent Marshall	director	10959 CUTTEN ROAD, HOUSTON TX 77066
Stacey Dwyer	director, officer: Chief Operating Officer	301 COMMERCE STREET, SUITE 500, FORT WORTH TX 76102