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ConAgra Foods Inc (NYSE:CAG)
Beneish M-Score
-2.87 (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 -2.87 suggests that the company is not a manipulator.

CAG' s 10-Year Beneish M-Score Range
Min: -3.12   Max: -1.27
Current: -2.87

-3.12
-1.27

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.


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 * 0.8835+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
=-2.87

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

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

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)
=(1201.1 / 16677.5) / (1415.1 / 17359.7)
=0.07201919 / 0.08151639
=0.8835

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)
=(703.8 / 17359.7) / (888.5 / 16677.5)
=0.21148983 / 0.20824464
=1.0156

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 - (4116.1 + 3635.4) / 19501.7) / (1 - (4755.6 + 3932.3) / 20786.4)
=0.60252183 / 0.58203922
=1.0352

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
=16677.5 / 17359.7
=0.9607

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))
=0.12305702 / 0.1433419
=0.8585

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)
=0.17151851 / 0.13347581
=1.285

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)
=0.56786331 / 0.6013836
=0.9443

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
=(402.4 - -83.7 - 1413.2) / 19501.7
=-0.0475

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.


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

May05May06May07May08May09May10May11May12May13May14
DSRI 0.91391.03760.67670.99040.79691.14590.98161.011.19070.8374
GMI 1.02581.00410.96951.08941.0520.87931.07161.1110.92751.0929
AQI 1.03230.90660.95190.95771.23030.95380.96621.12941.24460.9807
SGI 1.04190.90051.02731.0981.1010.94881.01851.0781.16811.1427
DEPI 0.80260.92540.88621.23780.9890.97340.92980.99721.15450.7574
SGAI 0.971.19090.93730.90570.87251.13180.81521.22640.91521.1339
LVGI 0.91980.95411.00810.99810.88410.98580.97671.01461.35540.9783
TATA -0.0485-0.0672-0.01750.05760.075-0.0655-0.0469-0.051-0.0313-0.0644
M-score -2.71-2.91-2.88-2.06-2.05-2.80-2.64-2.57-2.32-2.81

ConAgra Foods Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 0.97230.98791.17411.19071.06561.08660.83650.83550.82380.8835
GMI 0.99230.96360.95250.92751.06841.09551.09041.09421.02921.0156
AQI 1.13081.06711.28341.24461.24461.28641.02780.98071.04861.0352
SGI 1.07531.08081.09931.16811.21321.25481.25071.14531.05250.9607
DEPI 1.03461.06551.31131.15451.03630.95320.69730.75740.80370.8585
SGAI 1.2381.23431.39650.91520.91060.89220.781.13171.14491.285
LVGI 1.02291.05931.46871.35541.31231.25580.93440.97830.93060.9443
TATA -0.0359-0.0294-0.0253-0.0313-0.0286-0.0377-0.0369-0.0644-0.0461-0.0475
M-score -2.60-2.60-2.45-2.32-2.31-2.25-2.50-2.80-2.80-2.87
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