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ConAgra Foods Inc (NYSE:CAG)
Beneish M-Score
-2.80 (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 -2.80 suggests that the company is not a manipulator.

CAG' s 10-Year Beneish M-Score Range
Min: -3.12   Max: -1.27
Current: -2.8

-3.12
-1.27

During the past 13 years, the highest Beneish M-Score of ConAgra Foods Inc was -1.27. The lowest was -3.12. And the median was -2.64.


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 * 0.7966+0.528 * 1.0541+0.404 * 1.0486+0.892 * 1.0884+0.115 * 0.7832
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1156+4.679 * -0.0505-0.327 * 0.9306
=-2.80

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

This Year (Aug14) TTM:Last Year (Aug13) TTM:
Accounts Receivable was $1,080 Mil.
Revenue was 3701 + 4435.5 + 4389.7 + 4713.9 = $17,240 Mil.
Gross Profit was 703.8 + 905.5 + 975.2 + 1014.7 = $3,599 Mil.
Total Current Assets was $3,691 Mil.
Total Assets was $19,373 Mil.
Property, Plant and Equipment(Net PPE) was $3,668 Mil.
Depreciation, Depletion and Amortization(DDA) was $611 Mil.
Selling, General & Admin. Expense(SGA) was $2,701 Mil.
Total Current Liabilities was $2,900 Mil.
Long-Term Debt was $7,917 Mil.
Net Income was 482.3 + -324.2 + 234.3 + 248.7 = $641 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 233.6 + 608.9 + 386.6 + 389.6 = $1,619 Mil.
Accounts Receivable was $1,246 Mil.
Revenue was 3715.8 + 4563.3 + 3833.8 + 3727.2 = $15,840 Mil.
Gross Profit was 792.1 + 961.1 + 870.9 + 861.6 = $3,486 Mil.
Total Current Assets was $4,457 Mil.
Total Assets was $20,469 Mil.
Property, Plant and Equipment(Net PPE) was $3,906 Mil.
Depreciation, Depletion and Amortization(DDA) was $492 Mil.
Selling, General & Admin. Expense(SGA) was $2,224 Mil.
Total Current Liabilities was $3,463 Mil.
Long-Term Debt was $8,818 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)
=(1080.4 / 17240.1) / (1246.1 / 15840.1)
=0.06266785 / 0.07866743
=0.7966

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)
=(905.5 / 15840.1) / (703.8 / 17240.1)
=0.22005543 / 0.20876909
=1.0541

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 - (3691.4 + 3667.6) / 19373.1) / (1 - (4457.4 + 3905.8) / 20468.8)
=0.62014339 / 0.59141718
=1.0486

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
=17240.1 / 15840.1
=1.0884

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))
=(492 / (492 + 3905.8)) / (611.2 / (611.2 + 3667.6))
=0.11187412 / 0.14284379
=0.7832

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)
=(2700.6 / 17240.1) / (2224.2 / 15840.1)
=0.15664642 / 0.14041578
=1.1156

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)
=((7916.8 + 2900.1) / 19373.1) / ((8818.1 + 3463.3) / 20468.8)
=0.55834637 / 0.60000586
=0.9306

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
=(641.1 - 0 - 1618.7) / 19373.1
=-0.0505

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 -2.80 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 0.91391.03760.67670.99040.78921.16330.96981.00881.19880.8383
GMI 1.02581.00410.96951.08941.04840.87871.08721.11370.91121.0981
AQI 1.03230.90660.95190.95771.24990.9430.9621.12941.2550.9726
SGI 1.04190.90051.02731.0981.07460.96691.03091.07931.1541.1475
DEPI 0.80260.92540.88621.23780.99320.96890.93010.99721.13130.7729
SGAI 0.971.19090.93730.90570.8881.11760.79921.22610.93341.1286
LVGI 0.91980.95411.00810.99810.8830.98710.97671.01461.35540.9783
TATA -0.0485-0.0672-0.01750.05760.075-0.0636-0.0469-0.051-0.0313-0.0644
M-score -2.71-2.91-2.88-2.06-2.07-2.76-2.63-2.57-2.34-2.80

ConAgra Foods Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
DSRI 1.00880.97780.99921.19391.19881.10711.12320.86050.86010.7966
GMI 1.11370.98670.95080.93370.91121.03361.06531.06441.08051.0541
AQI 1.12941.13081.06711.28341.2551.24461.28641.02780.97261.0486
SGI 1.07931.06921.06851.08111.1541.16771.2141.21571.11851.0884
DEPI 0.99721.03651.07011.32081.13131.05220.95410.69620.77290.7832
SGAI 1.22611.26791.29391.48210.93340.93940.9110.78881.14931.1156
LVGI 1.01461.02291.05931.46871.35541.31231.25580.93440.97830.9306
TATA -0.051-0.0366-0.0307-0.0265-0.0313-0.0286-0.0377-0.0369-0.0644-0.0505
M-score -2.57-2.61-2.62-2.47-2.34-2.33-2.28-2.52-2.82-2.80
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