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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 * 0.8326||+||0.528 * 0.9274||+||0.404 * 0.9511||+||0.892 * 0.9393||+||0.115 * 0.6167|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2782||+||4.679 * -0.0671||-||0.327 * 0.6706|
|This Year (Nov16) TTM:||Last Year (Nov15) TTM:|
|Accounts Receivable was $700 Mil.|
Revenue was 2088.4 + 2667.5 + 2827.5 + 2924.1 = $10,508 Mil.
Gross Profit was 647.5 + 724.1 + 760.9 + 800.4 = $2,933 Mil.
Total Current Assets was $3,345 Mil.
Total Assets was $11,425 Mil.
Property, Plant and Equipment(Net PPE) was $1,669 Mil.
Depreciation, Depletion and Amortization(DDA) was $366 Mil.
Selling, General & Admin. Expense(SGA) was $1,979 Mil.
Total Current Liabilities was $1,745 Mil.
Long-Term Debt was $3,214 Mil.
Net Income was 122.1 + 186.2 + 117.6 + 204.6 = $631 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 216.3 + 325.9 + 512.3 + 343 = $1,398 Mil.
|Accounts Receivable was $894 Mil.
Revenue was 2358.8 + 2794.9 + 3125.5 + 2907.3 = $11,187 Mil.
Gross Profit was 668 + 701.1 + 806.6 + 720 = $2,896 Mil.
Total Current Assets was $3,913 Mil.
Total Assets was $15,995 Mil.
Property, Plant and Equipment(Net PPE) was $2,646 Mil.
Depreciation, Depletion and Amortization(DDA) was $330 Mil.
Selling, General & Admin. Expense(SGA) was $1,648 Mil.
Total Current Liabilities was $3,954 Mil.
Long-Term Debt was $6,400 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)|
|=||(699.5 / 10507.5)||/||(894.4 / 11186.5)|
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)|
|=||(2895.7 / 11186.5)||/||(2932.9 / 10507.5)|
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 - (3345 + 1669.3) / 11425)||/||(1 - (3912.5 + 2645.9) / 15994.6)|
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))|
|=||(330.2 / (330.2 + 2645.9))||/||(366.2 / (366.2 + 1669.3))|
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)|
|=||(1978.7 / 10507.5)||/||(1648.1 / 11186.5)|
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)|
|=||((3214.3 + 1745.4) / 11425)||/||((6400.4 + 3953.6) / 15994.6)|
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|
|=||(630.5 - 0||-||1397.5)||/||11425|
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 -3.04 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