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ConAgra Foods Inc (NYSE:CAG)
Beneish M-Score
-3.42 (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 -3.42 suggests that the company is not a manipulator.

CAG' s Beneish M-Score Range Over the Past 10 Years
Min: -3.74   Max: -1.26
Current: -3.42

-3.74
-1.26

During the past 13 years, the highest Beneish M-Score of ConAgra Foods Inc was -1.26. The lowest was -3.74. And the median was -2.68.


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 * 0.652+0.528 * 1.0095+0.404 * 0.9169+0.892 * 1.2401+0.115 * 0.5923
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3183+4.679 * -0.1532-0.327 * 0.9578
=-3.42

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

This Year (Feb16) TTM:Last Year (Feb15) TTM:
Accounts Receivable was $850 Mil.
Revenue was 2924.1 + 3092.7 + 2793.8 + 7020.9 = $15,832 Mil.
Gross Profit was 800.4 + 828 + 700.8 + 1239.5 = $3,569 Mil.
Total Current Assets was $3,528 Mil.
Total Assets was $13,187 Mil.
Property, Plant and Equipment(Net PPE) was $2,646 Mil.
Depreciation, Depletion and Amortization(DDA) was $590 Mil.
Selling, General & Admin. Expense(SGA) was $3,746 Mil.
Total Current Liabilities was $2,616 Mil.
Long-Term Debt was $4,903 Mil.
Net Income was 204.6 + 154.9 + -1154.1 + 209.2 = $-585 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 377.1 + 251.2 + 66.8 + 740.1 = $1,435 Mil.
Accounts Receivable was $1,051 Mil.
Revenue was 2907.3 + 3136.4 + 2763 + 3959.4 = $12,766 Mil.
Gross Profit was 720 + 757.3 + 590.8 + 836.9 = $2,905 Mil.
Total Current Assets was $3,923 Mil.
Total Assets was $17,869 Mil.
Property, Plant and Equipment(Net PPE) was $3,580 Mil.
Depreciation, Depletion and Amortization(DDA) was $434 Mil.
Selling, General & Admin. Expense(SGA) was $2,291 Mil.
Total Current Liabilities was $3,717 Mil.
Long-Term Debt was $6,919 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)
=(849.6 / 15831.5) / (1050.7 / 12766.1)
=0.05366516 / 0.08230391
=0.652

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)
=(828 / 12766.1) / (800.4 / 15831.5)
=0.22755579 / 0.22541768
=1.0095

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 - (3527.5 + 2645.7) / 13187.2) / (1 - (3923.3 + 3579.9) / 17868.9)
=0.5318794 / 0.58009726
=0.9169

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
=15831.5 / 12766.1
=1.2401

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))
=(433.6 / (433.6 + 3579.9)) / (590.2 / (590.2 + 2645.7))
=0.10803538 / 0.1823913
=0.5923

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)
=(3745.7 / 15831.5) / (2291.2 / 12766.1)
=0.23659792 / 0.17947533
=1.3183

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)
=((4902.7 + 2615.6) / 13187.2) / ((6919.3 + 3716.9) / 17868.9)
=0.57012103 / 0.5952353
=0.9578

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
=(-585.4 - 0 - 1435.2) / 13187.2
=-0.1532

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 -3.42 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

May06May07May08May09May10May11May12May13May14May15
DSRI 1.17550.66921.1270.77311.18550.98161.011.18440.72391.0278
GMI 0.87750.93011.11511.04870.87931.07161.1110.92751.09291.0063
AQI 0.90660.95190.95771.24990.9430.9621.12941.2550.9860.9872
SGI 0.79491.03880.96491.0970.94881.01851.0781.16811.14270.8944
DEPI 1.0710.891.26960.96360.99320.9370.99721.12720.74481.0087
SGAI 1.32860.94790.95940.87481.13180.81521.22640.91521.13391.403
LVGI 0.95411.00810.99810.8830.98710.97671.01461.35540.97670.9885
TATA -0.0721-0.01510.06060.075-0.0655-0.0469-0.051-0.0313-0.0646-0.0988
M-score -2.97-2.88-2.03-2.07-2.77-2.65-2.57-2.33-2.91-3.08

ConAgra Foods Inc Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
DSRI 1.31111.02970.70330.80830.88390.93490.92010.72770.65010.652
GMI 0.97630.96421.1271.06541.04641.04291.06071.03161.02061.0095
AQI 1.28641.02780.9861.04861.03520.98020.98720.96470.97920.9169
SGI 1.041.0161.17631.07260.96030.8810.9991.0651.14551.2401
DEPI 1.01640.74390.73150.84130.96681.16130.97170.70140.65280.5923
SGAI 1.02340.90071.14041.13731.16041.21751.25421.24521.28031.3183
LVGI 1.25580.93440.97670.93060.94431.01350.98851.14771.140.9578
TATA -0.039-0.0381-0.0655-0.0514-0.0513-0.119-0.0988-0.2023-0.1954-0.1532
M-score -2.32-2.62-2.89-2.80-2.84-3.21-3.03-3.74-3.72-3.42
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