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Dean Foods Co (NYSE:DF)
Beneish M-Score
-3.66 (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 -3.66 suggests that the company is not a manipulator.

DF' s Beneish M-Score Range Over the Past 10 Years
Min: -4.28   Max: -0.66
Current: -3.66

-4.28
-0.66

During the past 13 years, the highest Beneish M-Score of Dean Foods Co was -0.66. The lowest was -4.28. And the median was -2.74.


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 * 0.9526+0.528 * 0.7244+0.404 * 0.726+0.892 * 0.8546+0.115 * 0.9387
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2312+4.679 * -0.1491-0.327 * 1.0264
=-3.66

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $661 Mil.
Revenue was 2022.5 + 2033.693 + 2014.706 + 2050.762 = $8,122 Mil.
Gross Profit was 508.471 + 491.988 + 495.641 + 478.309 = $1,974 Mil.
Total Current Assets was $1,078 Mil.
Total Assets was $2,528 Mil.
Property, Plant and Equipment(Net PPE) was $1,174 Mil.
Depreciation, Depletion and Amortization(DDA) was $177 Mil.
Selling, General & Admin. Expense(SGA) was $1,730 Mil.
Total Current Liabilities was $762 Mil.
Long-Term Debt was $841 Mil.
Net Income was 18.48 + 20.233 + 26.519 + -73.74 = $-9 Mil.
Non Operating Income was 2.047 + 0.964 + 0.294 + -43.163 = $-40 Mil.
Cash Flow from Operations was 86.125 + 50.257 + 114.192 + 157.579 = $408 Mil.
Accounts Receivable was $812 Mil.
Revenue was 2395.007 + 2373.28 + 2393.869 + 2341.04 = $9,503 Mil.
Gross Profit was 441.4 + 416.8 + 399.088 + 416.175 = $1,673 Mil.
Total Current Assets was $1,180 Mil.
Total Assets was $2,770 Mil.
Property, Plant and Equipment(Net PPE) was $1,173 Mil.
Depreciation, Depletion and Amortization(DDA) was $164 Mil.
Selling, General & Admin. Expense(SGA) was $1,644 Mil.
Total Current Liabilities was $794 Mil.
Long-Term Debt was $916 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)
=(661.141 / 8121.661) / (812.073 / 9503.196)
=0.08140465 / 0.08545262
=0.9526

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)
=(491.988 / 9503.196) / (508.471 / 8121.661)
=0.17609476 / 0.24310409
=0.7244

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 - (1077.563 + 1174.137) / 2528.015) / (1 - (1180.06 + 1172.596) / 2769.636)
=0.10930117 / 0.15055408
=0.726

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
=8121.661 / 9503.196
=0.8546

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))
=(164.297 / (164.297 + 1172.596)) / (176.884 / (176.884 + 1174.137))
=0.12289465 / 0.13092617
=0.9387

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)
=(1729.641 / 8121.661) / (1643.797 / 9503.196)
=0.21296641 / 0.17297307
=1.2312

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)
=((840.932 + 761.895) / 2528.015) / ((916.481 + 794.451) / 2769.636)
=0.63402591 / 0.61774616
=1.0264

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
=(-8.508 - -39.858 - 408.153) / 2528.015
=-0.1491

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 -3.66 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.98370.99530.87171.16821.02681.09110.9310.99741.02420.9526
GMI 0.93571.17160.97920.84641.09681.180.95561.09831.16810.7244
AQI 0.96910.9891.00820.98330.96970.54250.29931.89040.96910.726
SGI 0.99251.17071.05350.89230.97360.89790.95460.97211.0540.8546
DEPI 0.95360.98950.98861.07211.0291.17130.68731.04031.01770.9387
SGAI 1.05710.88871.02141.18811.01680.88880.99470.92520.94621.2312
LVGI 1.00821.41330.90550.87540.96261.31290.94160.72241.03181.0264
TATA -0.0495-0.0303-0.0757-0.0541-0.0537-0.3504-0.05710.2773-0.0626-0.1491
M-score -2.80-2.50-2.89-2.75-2.68-4.28-3.17-0.69-2.63-3.66

Dean Foods Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.59851.05360.81551.08731.0641.02420.84060.80330.95260.9526
GMI 1.05711.13521.14041.17251.17551.16811.03970.88910.79460.7244
AQI 0.43261.89040.45951.07370.960.96910.85630.83180.81910.726
SGI 1.25720.92030.98321.00211.02481.0541.01630.95690.90330.8546
DEPI 0.41091.04030.68721.09271.07561.01770.9960.9510.92520.9387
SGAI 0.9020.9050.92530.92390.92760.94620.99771.08031.16081.2312
LVGI 0.73810.72240.94030.92971.01131.03180.99990.99851.01131.0264
TATA 0.2120.27730.04770.0270.0085-0.0626-0.1271-0.1652-0.1627-0.1491
M-score -1.79-0.66-2.59-2.10-2.27-2.63-3.24-3.62-3.59-3.66
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