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GuruFocus has detected 6 Warning Signs with Campbell Soup Co $CPB.
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Campbell Soup Co (NYSE:CPB)
Beneish M-Score
-2.89 (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 -2.89 suggests that the company is not a manipulator.

CPB' s Beneish M-Score Range Over the Past 10 Years
Min: -3.11   Max: -1.8
Current: -2.89

-3.11
-1.8

During the past 13 years, the highest Beneish M-Score of Campbell Soup Co was -1.80. The lowest was -3.11. 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 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 * 0.9351+0.528 * 0.973+0.404 * 0.9761+0.892 * 0.9916+0.115 * 1.0016
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0234+4.679 * -0.0675-0.327 * 0.9863
=-2.89

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

This Year (Jan17) TTM:Last Year (Jan16) TTM:
Accounts Receivable was $714 Mil.
Revenue was 2171 + 2202 + 1687 + 1870 = $7,930 Mil.
Gross Profit was 825 + 841 + 546 + 660 = $2,872 Mil.
Total Current Assets was $1,896 Mil.
Total Assets was $7,570 Mil.
Property, Plant and Equipment(Net PPE) was $2,375 Mil.
Depreciation, Depletion and Amortization(DDA) was $310 Mil.
Selling, General & Admin. Expense(SGA) was $1,510 Mil.
Total Current Liabilities was $2,436 Mil.
Long-Term Debt was $2,293 Mil.
Net Income was 101 + 292 + -81 + 185 = $497 Mil.
Non Operating Income was -219 + -7 + -142 + 0 = $-368 Mil.
Cash Flow from Operations was 446 + 221 + 280 + 429 = $1,376 Mil.
Accounts Receivable was $770 Mil.
Revenue was 2201 + 2203 + 1693 + 1900 = $7,997 Mil.
Gross Profit was 819 + 755 + 562 + 682 = $2,818 Mil.
Total Current Assets was $2,132 Mil.
Total Assets was $8,079 Mil.
Property, Plant and Equipment(Net PPE) was $2,340 Mil.
Depreciation, Depletion and Amortization(DDA) was $306 Mil.
Selling, General & Admin. Expense(SGA) was $1,488 Mil.
Total Current Liabilities was $2,566 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)
=(714 / 7930) / (770 / 7997)
=0.09003783 / 0.09628611
=0.9351

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)
=(2818 / 7997) / (2872 / 7930)
=0.35238214 / 0.36216898
=0.973

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 - (1896 + 2375) / 7570) / (1 - (2132 + 2340) / 8079)
=0.43579921 / 0.44646615
=0.9761

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
=7930 / 7997
=0.9916

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))
=(306 / (306 + 2340)) / (310 / (310 + 2375))
=0.11564626 / 0.11545624
=1.0016

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)
=(1510 / 7930) / (1488 / 7997)
=0.19041614 / 0.18606978
=1.0234

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)
=((2293 + 2436) / 7570) / ((2551 + 2566) / 8079)
=0.62470277 / 0.63337047
=0.9863

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
=(497 - -368 - 1376) / 7570
=-0.0675

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 -2.89 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 1.16940.90590.97660.95831.17540.98311.02321.02760.98790.9822
GMI 1.03051.02490.99330.97271.0151.03241.08291.03181.01830.9857
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 0.91620.97460.99360.98530.96021.0190.95140.90431.00741.0487
LVGI 0.9870.9791.02610.99881.00720.96951.1220.92151.0260.9388
TATA 0.02330.0907-0.0609-0.0314-0.0391-0.0504-0.0595-0.0027-0.0504-0.0967
M-score -2.20-2.05-2.85-2.67-2.55-2.70-2.59-2.35-2.75-2.96

Campbell Soup Co Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
DSRI 0.98510.95520.89580.98791.02721.00791.04570.98221.02340.9351
GMI 1.03131.05631.03491.02271.01750.96730.98160.98150.94840.973
AQI 0.95260.98630.97470.98870.9920.99220.98790.9981.00050.9761
SGI 1.06051.06161.06960.97750.96080.96220.96680.9850.99130.9916
DEPI 1.21691.09211.02581.0171.03281.03241.02451.00790.98911.0016
SGAI 0.86360.87370.91851.01281.04931.07021.08151.04311.01561.0234
LVGI 0.930.96440.98831.0261.00710.98090.97060.93880.95780.9863
TATA -0.0133-0.0359-0.0356-0.0521-0.0591-0.068-0.0724-0.0917-0.0768-0.0675
M-score -2.43-2.57-2.65-2.76-2.77-2.85-2.82-2.94-2.84-2.89
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