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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.
During the past 13 years, the highest Beneish M-Score of Conagra Brands Inc was -1.26. The lowest was -3.74. And the median was -2.69.
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 Conagra Brands 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 * 0.8291||+||0.528 * 0.9227||+||0.404 * 1.1289||+||0.892 * 0.8537||+||0.115 * 0.8345|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2118||+||4.679 * -0.0717||-||0.327 * 0.7362|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Feb17) TTM:||Last Year (Feb16) TTM:|
|Accounts Receivable was $601 Mil.|
Revenue was 1981.2 + 2088.4 + 2667.5 + 2827.5 = $9,565 Mil.
Gross Profit was 621 + 647.5 + 724.1 + 760.9 = $2,754 Mil.
Total Current Assets was $2,539 Mil.
Total Assets was $10,499 Mil.
Property, Plant and Equipment(Net PPE) was $1,656 Mil.
Depreciation, Depletion and Amortization(DDA) was $292 Mil.
Selling, General & Admin. Expense(SGA) was $1,839 Mil.
Total Current Liabilities was $1,565 Mil.
Long-Term Debt was $2,842 Mil.
Net Income was 179.7 + 122.1 + 186.2 + 117.6 = $606 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 304.3 + 216.3 + 325.9 + 512.3 = $1,359 Mil.
|Accounts Receivable was $850 Mil.
Revenue was 2924.1 + 2358.8 + 2794.9 + 3125.5 = $11,203 Mil.
Gross Profit was 800.4 + 668 + 701.1 + 806.6 = $2,976 Mil.
Total Current Assets was $3,528 Mil.
Total Assets was $13,187 Mil.
Property, Plant and Equipment(Net PPE) was $2,646 Mil.
Depreciation, Depletion and Amortization(DDA) was $378 Mil.
Selling, General & Admin. Expense(SGA) was $1,777 Mil.
Total Current Liabilities was $2,616 Mil.
Long-Term Debt was $4,903 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(601.4 / 9564.6)||/||(849.6 / 11203.3)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(2976.1 / 11203.3)||/||(2753.5 / 9564.6)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (2539.1 + 1655.8) / 10499)||/||(1 - (3527.5 + 2645.7) / 13187.2)|
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.
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))|
|=||(378.3 / (378.3 + 2645.7))||/||(292 / (292 + 1655.8))|
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)|
|=||(1838.8 / 9564.6)||/||(1777.4 / 11203.3)|
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)|
|=||((2841.7 + 1564.9) / 10499)||/||((4902.7 + 2615.6) / 13187.2)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(605.6 - 0||-||1358.8)||/||10499|
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.
Conagra Brands Inc has a M-score of -3.06 suggests that the company will not be a manipulator.
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
Conagra Brands Inc Annual Data
Conagra Brands Inc Quarterly Data