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Dean Foods Co (NYSE:DF)
Beneish M-Score
-3.62 (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.

Dean Foods Co has a M-score of -3.62 suggests that the company is not a manipulator.

DF' s 10-Year Beneish M-Score Range
Min: -4.48   Max: 0.86
Current: -3.62

-4.48
0.86

During the past 13 years, the highest Beneish M-Score of Dean Foods Co was 0.86. The lowest was -4.48. And the median was -2.60.


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 Dean Foods 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 * 0.8033+0.528 * 0.8891+0.404 * 0.8318+0.892 * 0.9569+0.115 * 0.951
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0803+4.679 * -0.1652-0.327 * 0.9985
=-3.62

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $614 Mil.
Revenue was 2014.706 + 2050.762 + 2395.007 + 2373.28 = $8,834 Mil.
Gross Profit was 495.641 + 478.309 + 441.4 + 416.8 = $1,832 Mil.
Total Current Assets was $1,065 Mil.
Total Assets was $2,509 Mil.
Property, Plant and Equipment(Net PPE) was $1,141 Mil.
Depreciation, Depletion and Amortization(DDA) was $170 Mil.
Selling, General & Admin. Expense(SGA) was $1,677 Mil.
Total Current Liabilities was $720 Mil.
Long-Term Debt was $838 Mil.
Net Income was 26.519 + -73.74 + 5.277 + -15.972 = $-58 Mil.
Non Operating Income was 0.294 + -43.163 + -0.577 + 0.487 = $-43 Mil.
Cash Flow from Operations was 114.192 + 157.579 + 104.875 + 22.803 = $399 Mil.
Accounts Receivable was $799 Mil.
Revenue was 2393.869 + 2341.04 + 2295.45 + 2200.899 = $9,231 Mil.
Gross Profit was 399.088 + 416.175 + 445.77 + 441.285 = $1,702 Mil.
Total Current Assets was $1,212 Mil.
Total Assets was $2,803 Mil.
Property, Plant and Equipment(Net PPE) was $1,184 Mil.
Depreciation, Depletion and Amortization(DDA) was $166 Mil.
Selling, General & Admin. Expense(SGA) was $1,623 Mil.
Total Current Liabilities was $757 Mil.
Long-Term Debt was $986 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)
=(614.075 / 8833.755) / (798.802 / 9231.258)
=0.06951461 / 0.0865323
=0.8033

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)
=(478.309 / 9231.258) / (495.641 / 8833.755)
=0.18440802 / 0.20740331
=0.8891

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 - (1064.808 + 1140.784) / 2508.919) / (1 - (1212.002 + 1183.854) / 2803.322)
=0.12089948 / 0.14535112
=0.8318

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
=8833.755 / 9231.258
=0.9569

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))
=(166.136 / (166.136 + 1183.854)) / (169.568 / (169.568 + 1140.784))
=0.12306462 / 0.12940645
=0.951

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)
=(1677.405 / 8833.755) / (1622.558 / 9231.258)
=0.18988584 / 0.17576781
=1.0803

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)
=((838.066 + 719.708) / 2508.919) / ((985.641 + 757.476) / 2803.322)
=0.6208945 / 0.62180406
=0.9985

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
=(-57.916 - -42.959 - 399.449) / 2508.919
=-0.1652

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.

Dean Foods Co has a M-score of -3.62 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.

Dean Foods Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.94390.98370.99530.87171.14270.93691.02031.11550.99740.943
GMI 0.96690.93571.17160.97920.84641.12681.03841.05691.09831.1681
AQI 0.94550.96910.9891.00820.98330.96970.54250.29931.89040.9691
SGI 1.04620.99251.17071.05350.89231.09080.96030.79670.97211.054
DEPI 0.93120.95360.98950.98861.07210.93280.97820.90791.04031.0177
SGAI 1.02571.05710.88871.02141.18810.95111.01240.93360.92520.9462
LVGI 1.14941.00821.41330.90550.87540.96261.31290.94160.72241.0318
TATA -0.0351-0.0495-0.0303-0.0757-0.0541-0.0557-0.355-0.05710.2773-0.0626
M-score -2.76-2.80-2.50-2.89-2.77-2.65-4.43-3.06-0.69-2.70

Dean Foods Co Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.25070.94020.75641.05360.81551.08731.0640.9430.83150.8033
GMI 1.07531.12681.1891.13521.14041.17251.17551.16811.03970.8891
AQI 0.9370.38990.43261.89040.45951.07370.960.96910.85630.8318
SGI 0.80440.8860.99480.92030.98321.00211.02481.0541.01630.9569
DEPI 1.27430.68890.63431.04030.68721.09271.07561.01770.9960.951
SGAI 0.92310.88440.84170.9050.92530.92390.92760.94620.99771.0803
LVGI 0.76470.78330.73810.72240.94030.92971.01131.03180.99990.9985
TATA 0.04760.16950.2120.27730.04770.0270.0085-0.0626-0.1271-0.1652
M-score -2.07-1.97-1.78-0.66-2.59-2.10-2.27-2.70-3.25-3.62
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