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Conagra Brands Inc (NYSE:CAG)
Beneish M-Score
-2.70 (As of Today)

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 Brands Inc has a M-score of -3.31 suggests that the company is not a manipulator.

CAG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.83   Max: -1.26
Current: -2.7

-3.83
-1.26

During the past 13 years, the highest Beneish M-Score of Conagra Brands Inc was -1.26. The lowest was -3.83. And the median was -2.69.


Definition

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 * 1.1698+0.528 * 0.787+0.404 * 0.9065+0.892 * 0.7351+0.115 * 1.1632
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8657+4.679 * -0.1407-0.327 * 0.957
=-3.31

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (May16) TTM:Last Year (May15) TTM:
Accounts Receivable was $837 Mil.
Revenue was 2827.5 + 2924.1 + 3092.7 + 2793.8 = $11,638 Mil.
Gross Profit was 760.9 + 800.4 + 828 + 700.8 = $3,090 Mil.
Total Current Assets was $3,577 Mil.
Total Assets was $13,391 Mil.
Property, Plant and Equipment(Net PPE) was $2,710 Mil.
Depreciation, Depletion and Amortization(DDA) was $374 Mil.
Selling, General & Admin. Expense(SGA) was $2,209 Mil.
Total Current Liabilities was $2,532 Mil.
Long-Term Debt was $4,918 Mil.
Net Income was 117.6 + 204.6 + 154.9 + -1154.1 = $-677 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 512.3 + 377.1 + 251.2 + 66.8 = $1,207 Mil.
Accounts Receivable was $973 Mil.
Revenue was 4104.7 + 3876.7 + 4150 + 3701 = $15,832 Mil.
Gross Profit was 892.4 + 823.8 + 888.5 + 703.8 = $3,309 Mil.
Total Current Assets was $3,668 Mil.
Total Assets was $17,542 Mil.
Property, Plant and Equipment(Net PPE) was $3,608 Mil.
Depreciation, Depletion and Amortization(DDA) was $592 Mil.
Selling, General & Admin. Expense(SGA) was $3,472 Mil.
Total Current Liabilities was $3,310 Mil.
Long-Term Debt was $6,889 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(836.6 / 11638.1) / (972.9 / 15832.4)
=0.07188459 / 0.06144994
=1.1698

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)
=(3308.5 / 15832.4) / (3090.1 / 11638.1)
=0.20897021 / 0.26551585
=0.787

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3576.7 + 2710.3) / 13390.6) / (1 - (3667.7 + 3608.1) / 17542.2)
=0.53049154 / 0.58524016
=0.9065

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=11638.1 / 15832.4
=0.7351

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))
=(592.3 / (592.3 + 3608.1)) / (373.9 / (373.9 + 2710.3))
=0.14101038 / 0.12123079
=1.1632

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)
=(2209.4 / 11638.1) / (3472.1 / 15832.4)
=0.18984198 / 0.21930345
=0.8657

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)
=((4917.8 + 2532.4) / 13390.6) / ((6888.9 + 3310.2) / 17542.2)
=0.55637537 / 0.5814037
=0.957

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
=(-677 - 0 - 1207.4) / 13390.6
=-0.1407

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 -3.31 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Conagra Brands Inc Annual Data

May07May08May09May10May11May12May13May14May15May16
DSRI 0.67670.99040.79691.14590.98161.011.19070.94790.78081.1693
GMI 0.96951.08941.0520.87931.07161.1110.92751.09291.00630.7872
AQI 0.95190.95771.23030.95380.96621.12941.24460.98071.00090.9065
SGI 1.02731.0981.1010.94881.01851.0781.16811.14270.89440.7354
DEPI 0.88621.23780.9890.97340.92980.99721.15450.75740.96851.1632
SGAI 0.93730.90570.87251.13180.81521.22640.91521.13391.4030.8653
LVGI 1.00810.99810.88410.98580.97671.01461.35540.97830.98680.957
TATA -0.01510.05760.075-0.0655-0.0469-0.051-0.0313-0.0644-0.0988-0.1407
M-score -2.86-2.06-2.05-2.80-2.64-2.57-2.32-2.70-3.30-3.31

Conagra Brands Inc Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
DSRI 0.94580.82380.88360.91210.78250.89520.89541.01191.16981.3115
GMI 1.09411.02921.01551.02561.00510.94260.890.82390.7870.8189
AQI 0.98071.04861.03520.98021.00090.96470.97920.91690.90650.8714
SGI 1.14521.05240.96060.9030.89240.86570.83160.79910.73510.7713
DEPI 0.75740.80370.85850.93890.96850.84310.92811.02211.16321.3917
SGAI 1.13181.1451.28511.98371.40561.4481.33580.60180.86570.7987
LVGI 0.97830.93060.94431.01350.98681.14771.140.95780.9570.8287
TATA -0.0644-0.0505-0.0518-0.1195-0.0988-0.2023-0.1954-0.1532-0.1407-0.0626
M-score -2.70-2.82-2.89-3.38-3.30-3.83-3.82-3.41-3.31-2.70
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