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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.
During the past 13 years, the highest Beneish M-Score of Campbell Soup Co was -1.80. The lowest was -3.21. And the median was -2.67.
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|
|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
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)|
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)|
|=||(2818 / 7997)||/||(2872 / 7930)|
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 - (1896 + 2375) / 7570)||/||(1 - (2132 + 2340) / 8079)|
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))|
|=||(306 / (306 + 2340))||/||(310 / (310 + 2375))|
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)|
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)|
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|
|=||(497 - -368||-||1376)||/||7570|
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.
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
Campbell Soup Co Annual Data
Campbell Soup Co Quarterly Data