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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.
ConAgra Foods Inc has a M-score of -2.70 suggests that the company is not a manipulator.
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.
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|
|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
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)|
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)|
|=||(975.2 / 15426.6)||/||(905.5 / 17742.2)|
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 - (4230.8 + 3811.9) / 19366.4)||/||(1 - (4379.8 + 3757.6) / 20405.3)|
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))|
|=||(443.4 / (443.4 + 3757.6))||/||(602.9 / (602.9 + 3811.9))|
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)|
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)|
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|
|=||(303.1 - 0||-||1551.2)||/||19366.4|
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.
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