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GuruFocus has detected 5 Warning Signs with Campbell Soup Co $CPB.
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Campbell Soup Co (NYSE:CPB)
Beneish M-Score
-3.76 (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.

Campbell Soup Co has a M-score of -2.85 suggests that the company is not a manipulator.

CPB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.76   Max: -1.93
Current: -3.76

-3.76
-1.93

During the past 13 years, the highest Beneish M-Score of Campbell Soup Co was -1.93. The lowest was -3.76. And the median was -2.65.


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 Campbell Soup Co 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 * 1.0234+0.528 * 0.9484+0.404 * 1.0005+0.892 * 0.9913+0.115 * 0.9891
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0156+4.679 * -0.0784-0.327 * 0.9578
=-2.85

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Oct16) TTM:Last Year (Oct15) TTM:
Accounts Receivable was $841 Mil.
Revenue was 2202 + 1687 + 1870 + 2201 = $7,960 Mil.
Gross Profit was 841 + 546 + 660 + 819 = $2,866 Mil.
Total Current Assets was $2,146 Mil.
Total Assets was $8,039 Mil.
Property, Plant and Equipment(Net PPE) was $2,380 Mil.
Depreciation, Depletion and Amortization(DDA) was $311 Mil.
Selling, General & Admin. Expense(SGA) was $1,503 Mil.
Total Current Liabilities was $2,760 Mil.
Long-Term Debt was $2,298 Mil.
Net Income was 292 + -81 + 185 + 265 = $661 Mil.
Non Operating Income was -7 + -142 + 0 + 0 = $-149 Mil.
Cash Flow from Operations was 221 + 280 + 456 + 483 = $1,440 Mil.
Accounts Receivable was $829 Mil.
Revenue was 2203 + 1693 + 1900 + 2234 = $8,030 Mil.
Gross Profit was 755 + 562 + 682 + 743 = $2,742 Mil.
Total Current Assets was $2,337 Mil.
Total Assets was $8,304 Mil.
Property, Plant and Equipment(Net PPE) was $2,340 Mil.
Depreciation, Depletion and Amortization(DDA) was $302 Mil.
Selling, General & Admin. Expense(SGA) was $1,493 Mil.
Total Current Liabilities was $2,904 Mil.
Long-Term Debt was $2,551 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)
=(841 / 7960) / (829 / 8030)
=0.10565327 / 0.10323786
=1.0234

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)
=(2742 / 8030) / (2866 / 7960)
=0.34146949 / 0.36005025
=0.9484

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 - (2146 + 2380) / 8039) / (1 - (2337 + 2340) / 8304)
=0.43699465 / 0.43677746
=1.0005

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
=7960 / 8030
=0.9913

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))
=(302 / (302 + 2340)) / (311 / (311 + 2380))
=0.11430734 / 0.11557042
=0.9891

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)
=(1503 / 7960) / (1493 / 8030)
=0.1888191 / 0.18592777
=1.0156

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)
=((2298 + 2760) / 8039) / ((2551 + 2904) / 8304)
=0.62918273 / 0.65691233
=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
=(661 - -149 - 1440) / 8039
=-0.0784

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.

Campbell Soup Co has a M-score of -2.85 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 local exchange's currency.

Campbell Soup Co Annual Data

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
DSRI 1.16940.90590.97660.95831.08930.9841.00050.98911.13140.9822
GMI 1.03051.02490.99330.97271.0151.03241.08291.00641.04390.9857
AQI 0.92281.00150.95090.96881.00760.98921.14530.98660.98870.998
SGI 1.00571.0830.94851.01190.93061.00451.12221.02680.97750.985
DEPI 1.05850.92451.11761.08040.96461.03070.71861.31241.0171.0079
SGAI 0.91620.97460.99360.98530.96021.0190.95140.90251.00941.0487
LVGI 0.9870.9791.02610.99881.00720.96951.1220.92151.0260.9388
TATA 0.02330.0636-0.071-0.0339-0.0491-0.053-0.06740.0032-0.0504-0.0967
M-score -2.20-2.18-2.90-2.68-2.68-2.72-2.65-2.37-2.60-2.96

Campbell Soup Co Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 1.00150.99210.94631.13141.02721.00791.04570.98221.02340
GMI 1.0011.02281.00081.04391.04730.99641.0110.98570.94840.973
AQI 0.95260.98630.97470.98870.9920.99220.98790.9981.00050.9761
SGI 1.04321.02211.01250.97750.96080.96220.96680.9850.99130.9916
DEPI 1.21691.09211.02581.0171.03281.03241.02451.00790.98911.0016
SGAI 0.85820.86920.91271.00941.05711.07841.08981.04871.01561.0234
LVGI 0.930.96440.98831.0261.00710.98090.97060.93880.95780.9863
TATA -0.0058-0.0281-0.0276-0.0504-0.0591-0.0662-0.074-0.0934-0.0784-0.0711
M-score -2.41-2.55-2.64-2.60-2.75-2.82-2.82-2.94-2.85-3.76
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