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ConAgra Foods 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 Foods Inc has a M-score of -2.70 suggests that the company is not a manipulator.

CAG' s 10-Year Beneish M-Score Range
Min: -3.01   Max: -1.15
Current: -2.7

-3.01
-1.15

During the past 13 years, the highest Beneish M-Score of ConAgra Foods Inc was -1.15. The lowest was -3.01. 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 * 0.9468+0.528 * 1.0995+0.404 * 0.9726+0.892 * 1.1501+0.115 * 0.7729
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1264+4.679 * -0.0644-0.327 * 0.9783
=-2.70

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

This Year (May14) TTM:Last Year (May13) TTM:
Accounts Receivable was $1,393 Mil.
Revenue was 4436.8 + 4389.7 + 4713.9 + 4201.8 = $17,742 Mil.
Gross Profit was 905.5 + 975.2 + 1014.7 + 830.9 = $3,726 Mil.
Total Current Assets was $4,231 Mil.
Total Assets was $19,366 Mil.
Property, Plant and Equipment(Net PPE) was $3,812 Mil.
Depreciation, Depletion and Amortization(DDA) was $603 Mil.
Selling, General & Admin. Expense(SGA) was $2,768 Mil.
Total Current Liabilities was $2,642 Mil.
Long-Term Debt was $8,768 Mil.
Net Income was -324.2 + 234.3 + 248.7 + 144.3 = $303 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 608.9 + 386.6 + 389.6 + 166.1 = $1,551 Mil.
Accounts Receivable was $1,279 Mil.
Revenue was 4563.3 + 3833.8 + 3727.2 + 3302.3 = $15,427 Mil.
Gross Profit was 961.1 + 870.9 + 861.6 + 868.6 = $3,562 Mil.
Total Current Assets was $4,380 Mil.
Total Assets was $20,405 Mil.
Property, Plant and Equipment(Net PPE) was $3,758 Mil.
Depreciation, Depletion and Amortization(DDA) was $443 Mil.
Selling, General & Admin. Expense(SGA) was $2,137 Mil.
Total Current Liabilities was $3,401 Mil.
Long-Term Debt was $8,887 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)
=(1393.2 / 17742.2) / (1279.4 / 15426.6)
=0.07852465 / 0.08293467
=0.9468

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)
=(975.2 / 15426.6) / (905.5 / 17742.2)
=0.23091284 / 0.21002469
=1.0995

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 - (4230.8 + 3811.9) / 19366.4) / (1 - (4379.8 + 3757.6) / 20405.3)
=0.58470857 / 0.60121145
=0.9726

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
=17742.2 / 15426.6
=1.1501

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))
=(443.4 / (443.4 + 3757.6)) / (602.9 / (602.9 + 3811.9))
=0.1055463 / 0.13656338
=0.7729

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)
=(2768 / 17742.2) / (2136.6 / 15426.6)
=0.15601222 / 0.13850103
=1.1264

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)
=((8767.6 + 2642.4) / 19366.4) / ((8886.9 + 3401.3) / 20405.3)
=0.58916474 / 0.60220629
=0.9783

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
=(303.1 - 0 - 1551.2) / 19366.4
=-0.0644

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 -2.70 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 0.87411.03760.67670.99040.79691.14590.9751.00881.19880.9489
GMI 1.02581.00410.96951.08941.0520.87931.08281.11370.91121.0981
AQI 1.03230.90660.95190.95771.23030.95380.96621.12941.2550.9726
SGI 1.04190.90051.02731.0981.1010.94881.02541.07931.1541.1475
DEPI 0.80260.92540.88621.23781.02140.94250.92980.99721.13130.7729
SGAI 0.971.19090.93730.90570.87251.13180.80321.22610.93341.1286
LVGI 0.91980.95411.00810.99810.88410.98580.97671.01461.35540.9783
TATA -0.0485-0.0672-0.01750.05760.075-0.0636-0.0469-0.051-0.0313-0.0644
M-score -2.75-2.91-2.88-2.06-2.04-2.80-2.64-2.57-2.34-2.70

ConAgra Foods Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
DSRI 1.00990.97880.99921.19391.19881.07411.09160.83710.94680.821
GMI 1.11250.98570.95080.93370.91121.05361.08451.0831.09951.0341
AQI 1.12941.13081.06711.28341.2551.24461.28641.02780.97261.0486
SGI 1.07811.0681.06851.08111.1541.20361.24911.24971.15011.0561
DEPI 1.20321.24671.07011.32081.13131.03870.95410.69620.77290.8015
SGAI 1.22741.26921.29391.48210.93340.92020.89360.77471.12641.1388
LVGI 1.01461.02291.05931.46871.35541.31231.25580.93440.97830.9306
TATA -0.051-0.0366-0.0307-0.0265-0.0313-0.0286-0.0377-0.0369-0.0644-0.0461
M-score -2.55-2.59-2.62-2.47-2.34-2.32-2.26-2.50-2.70-2.80
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