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ConAgra Foods, Inc. (NYSE:CAG)
Beneish M-Score
-2.26 (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 Foods, Inc. has a M-score of -2.50 suggests that the company is not a manipulator.

CAG' s 10-Year Beneish M-Score Range
Min: -3.08   Max: -1.15
Current: -2.26

-3.08
-1.15

During the past 13 years, the highest Beneish M-Score of ConAgra Foods, Inc. was -1.15. The lowest was -3.08. And the median was -2.63.


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 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 * 0.8341+0.528 * 1.0875+0.404 * 1.0278+0.892 * 1.2542+0.115 * 0.6944
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7715+4.679 * -0.0369-0.327 * 0.9344
=-2.50

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Feb14) TTM:Last Year (Feb13) TTM:
Accounts Receivable was $1,276 Mil.
Revenue was 4389.7 + 4713.9 + 4201.8 + 4628.1 = $17,934 Mil.
Gross Profit was 975.2 + 1014.7 + 830.9 + 958.9 = $3,780 Mil.
Total Current Assets was $4,521 Mil.
Total Assets was $20,433 Mil.
Property, Plant and Equipment(Net PPE) was $3,820 Mil.
Depreciation, Depletion and Amortization(DDA) was $595 Mil.
Selling, General & Admin. Expense(SGA) was $2,262 Mil.
Total Current Liabilities was $3,241 Mil.
Long-Term Debt was $8,761 Mil.
Net Income was 234.3 + 248.7 + 144.3 + 192.2 = $820 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 386.6 + 389.6 + 166.1 + 630.5 = $1,573 Mil.
Accounts Receivable was $1,219 Mil.
Revenue was 3833.8 + 3727.2 + 3302.3 + 3434.9 = $14,298 Mil.
Gross Profit was 870.9 + 861.6 + 868.6 + 676.2 = $3,277 Mil.
Total Current Assets was $5,146 Mil.
Total Assets was $21,108 Mil.
Property, Plant and Equipment(Net PPE) was $3,807 Mil.
Depreciation, Depletion and Amortization(DDA) was $393 Mil.
Selling, General & Admin. Expense(SGA) was $2,337 Mil.
Total Current Liabilities was $3,423 Mil.
Long-Term Debt was $9,845 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)
=(1275.6 / 17933.5) / (1219.3 / 14298.2)
=0.07112945 / 0.08527647
=0.8341

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)
=(1014.7 / 14298.2) / (975.2 / 17933.5)
=0.22921067 / 0.21076198
=1.0875

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 - (4520.6 + 3819.7) / 20433.3) / (1 - (5146 + 3807.2) / 21107.5)
=0.59182805 / 0.5758285
=1.0278

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
=17933.5 / 14298.2
=1.2542

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))
=(392.8 / (392.8 + 3807.2)) / (594.5 / (594.5 + 3819.7))
=0.09352381 / 0.13467899
=0.6944

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)
=(2261.9 / 17933.5) / (2337.4 / 14298.2)
=0.12612708 / 0.16347512
=0.7715

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)
=((8760.7 + 3240.5) / 20433.3) / ((9845.3 + 3422.5) / 21107.5)
=0.58733538 / 0.62858226
=0.9344

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
=(819.5 - 0 - 1572.8) / 20433.3
=-0.0369

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 -2.50 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 own currency.

ConAgra Foods, Inc. Annual Data

May04May05May06May07May08May09May10May11May12May13
DSRI 2.61560.87411.03760.67670.99040.78921.16330.96981.00881.2001
GMI 0.80241.02581.00410.96951.08941.04840.87871.08721.11370.9156
AQI 1.04331.03230.90660.95190.95771.24990.9430.9621.12941.2446
SGI 0.66091.04190.90051.02731.0981.07460.96691.03091.07931.1589
DEPI 1.39420.80260.92540.88621.23780.99320.96890.93010.99721.1545
SGAI 1.3530.971.19090.93730.90570.8881.11760.79921.22610.929
LVGI 0.95450.91980.95411.00810.99810.8830.98710.97671.01461.3554
TATA 0.0131-0.0485-0.0672-0.01750.05760.075-0.0636-0.0469-0.051-0.0313
M-score -1.32-2.75-2.91-2.88-2.06-2.07-2.76-2.63-2.57-2.33

ConAgra Foods, Inc. Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
DSRI 0.99470.98511.00880.97780.99921.19391.20011.06991.08760.8341
GMI 1.11411.13711.11370.98670.95080.93370.91561.05851.08921.0875
AQI 1.03721.07251.12941.13081.06711.28341.24461.24461.28641.0278
SGI 1.08271.09391.07931.06921.06851.08111.15891.20831.25381.2542
DEPI 0.89930.94210.99721.03651.07011.32081.15451.03540.95140.6944
SGAI 0.78170.75531.22611.26791.29391.48210.9290.91620.88990.7715
LVGI 1.01660.94821.01461.02291.05931.46871.35541.31231.25580.9344
TATA -0.0678-0.0325-0.051-0.0366-0.0307-0.0265-0.0313-0.0286-0.0377-0.0369
M-score -2.63-2.41-2.57-2.61-2.62-2.47-2.33-2.32-2.26-2.50
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