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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 Foods Inc was -1.27. The lowest was -3.03. And the median was -2.68.
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 * 0.9199||+||0.528 * 1.0607||+||0.404 * 0.9872||+||0.892 * 0.9993||+||0.115 * 0.9717|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2538||+||4.679 * -0.0988||-||0.327 * 0.9885|
|This Year (May15) TTM:||Last Year (May14) TTM:|
|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.
Net Income was 209.2 + -954.1 + 10 + 482.3 = $-253 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 740.1 + 322.8 + 184.1 + 233.6 = $1,481 Mil.
|Accounts Receivable was $1,058 Mil.
Revenue was 3959.4 + 3947.3 + 4221.1 + 3715.8 = $15,844 Mil.
Gross Profit was 836.9 + 923.1 + 959.8 + 792.1 = $3,512 Mil.
Total Current Assets was $4,231 Mil.
Total Assets was $19,320 Mil.
Property, Plant and Equipment(Net PPE) was $3,636 Mil.
Depreciation, Depletion and Amortization(DDA) was $577 Mil.
Selling, General & Admin. Expense(SGA) was $2,771 Mil.
Total Current Liabilities was $2,642 Mil.
Long-Term Debt was $8,721 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)|
|=||(972.9 / 15832.4)||/||(1058.4 / 15843.6)|
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)|
|=||(823.8 / 15843.6)||/||(892.4 / 15832.4)|
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 - (3667.7 + 3608.1) / 17542.2)||/||(1 - (4230.8 + 3636) / 19319.5)|
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))|
|=||(577.3 / (577.3 + 3636))||/||(592.3 / (592.3 + 3608.1))|
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)|
|=||(3472.1 / 15832.4)||/||(2771.2 / 15843.6)|
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)|
|=||((6888.9 + 3310.2) / 17542.2)||/||((8720.5 + 2642.4) / 19319.5)|
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|
|=||(-252.6 - 0||-||1480.6)||/||17542.2|
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 -3.03 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 Foods Inc Annual Data
ConAgra Foods Inc Quarterly Data