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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.
ConAgra Foods Inc has a M-score of -2.87 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of ConAgra Foods Inc was -1.27. The lowest was -3.12. And the median was -2.66.
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 Foods 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 * 0.8835||+||0.528 * 1.0156||+||0.404 * 1.0352||+||0.892 * 0.9607||+||0.115 * 0.8585|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.285||+||4.679 * -0.0475||-||0.327 * 0.9443|
|This Year (Nov14) TTM:||Last Year (Nov13) TTM:|
|Accounts Receivable was $1,201 Mil.|
Revenue was 4150 + 3701 + 4436.8 + 4389.7 = $16,678 Mil.
Gross Profit was 888.5 + 703.8 + 905.5 + 975.2 = $3,473 Mil.
Total Current Assets was $4,116 Mil.
Total Assets was $19,502 Mil.
Property, Plant and Equipment(Net PPE) was $3,635 Mil.
Depreciation, Depletion and Amortization(DDA) was $608 Mil.
Selling, General & Admin. Expense(SGA) was $2,861 Mil.
Total Current Liabilities was $3,405 Mil.
Long-Term Debt was $7,669 Mil.
Net Income was 10 + 482.3 + -324.2 + 234.3 = $402 Mil.
Non Operating Income was 0 + -83.7 + 0 + 0 = $-84 Mil.
Cash Flow from Operations was 184.1 + 233.6 + 608.9 + 386.6 = $1,413 Mil.
|Accounts Receivable was $1,415 Mil.
Revenue was 4713.9 + 4201.8 + 4593.5 + 3850.5 = $17,360 Mil.
Gross Profit was 1014.7 + 830.9 + 951.8 + 874 = $3,671 Mil.
Total Current Assets was $4,756 Mil.
Total Assets was $20,786 Mil.
Property, Plant and Equipment(Net PPE) was $3,932 Mil.
Depreciation, Depletion and Amortization(DDA) was $552 Mil.
Selling, General & Admin. Expense(SGA) was $2,317 Mil.
Total Current Liabilities was $3,730 Mil.
Long-Term Debt was $8,771 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)|
|=||(1201.1 / 16677.5)||/||(1415.1 / 17359.7)|
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)|
|=||(703.8 / 17359.7)||/||(888.5 / 16677.5)|
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 - (4116.1 + 3635.4) / 19501.7)||/||(1 - (4755.6 + 3932.3) / 20786.4)|
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))|
|=||(551.8 / (551.8 + 3932.3))||/||(608.3 / (608.3 + 3635.4))|
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)|
|=||(2860.5 / 16677.5)||/||(2317.1 / 17359.7)|
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)|
|=||((7669 + 3405.3) / 19501.7)||/||((8771.1 + 3729.5) / 20786.4)|
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|
|=||(402.4 - -83.7||-||1413.2)||/||19501.7|
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 Foods Inc has a M-score of -2.87 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 Foods Inc Annual Data
ConAgra Foods Inc Quarterly Data