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Dean Foods Co (NYSE:DF)
Beneish M-Score
-2.10 (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 -2.10 signals that the company is a manipulator.

DF' s 10-Year Beneish M-Score Range
Min: -4.48   Max: 0.86
Current: -2.1

-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 -2.59.


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 * 1.0873+0.528 * 1.1725+0.404 * 1.0737+0.892 * 1.0021+0.115 * 1.0927
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9239+4.679 * 0.027-0.327 * 0.9297
=-2.10

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
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.
Net Income was -0.645 + -8.956 + -37.677 + 415.12 = $368 Mil.
Non Operating Income was -0.048 + 0.321 + -63.476 + 415.909 = $353 Mil.
Cash Flow from Operations was -7.531 + 32.799 + -72.187 + -13.54 = $-60 Mil.
Accounts Receivable was $733 Mil.
Revenue was 2227.542 + 2292.43 + 2455.13 + 2236.969 = $9,212 Mil.
Gross Profit was 472.3 + 495.232 + 515.803 + 508.41 = $1,992 Mil.
Total Current Assets was $1,691 Mil.
Total Assets was $3,321 Mil.
Property, Plant and Equipment(Net PPE) was $1,181 Mil.
Depreciation, Depletion and Amortization(DDA) was $183 Mil.
Selling, General & Admin. Expense(SGA) was $1,753 Mil.
Total Current Liabilities was $1,098 Mil.
Long-Term Debt was $1,123 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)
=(798.802 / 9231.258) / (733.131 / 9212.071)
=0.0865323 / 0.07958373
=1.0873

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)
=(416.175 / 9212.071) / (399.088 / 9231.258)
=0.21621034 / 0.18440802
=1.1725

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 - (1212.002 + 1183.854) / 2803.322) / (1 - (1690.588 + 1181.094) / 3321.317)
=0.14535112 / 0.13537853
=1.0737

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
=9231.258 / 9212.071
=1.0021

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))
=(183.496 / (183.496 + 1181.094)) / (166.136 / (166.136 + 1183.854))
=0.13446969 / 0.12306462
=1.0927

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)
=(1622.558 / 9231.258) / (1752.599 / 9212.071)
=0.17576781 / 0.19025027
=0.9239

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)
=((985.641 + 757.476) / 2803.322) / ((1123.1 + 1098.222) / 3321.317)
=0.62180406 / 0.66880758
=0.9297

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
=(367.842 - 352.706 - -60.459) / 2803.322
=0.027

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 -2.10 signals that the company is likely to 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.05350.94390.98370.99530.87171.14270.93691.02031.11550.9974
GMI 1.0540.96690.93571.17160.97920.84641.12681.03841.05691.0983
AQI 1.06390.94550.96910.9891.00820.98330.96970.54250.29931.8904
SGI 1.05891.04620.99251.17071.05350.89231.09080.96030.79670.9721
DEPI 0.97280.93120.95360.98950.98861.07210.93280.97820.90791.0403
SGAI 1.03111.02571.05710.88871.02141.18810.95111.01240.93360.9252
LVGI 0.99191.14941.00821.41330.90550.87540.96261.31290.94160.7224
TATA -0.0363-0.0351-0.0495-0.0303-0.0757-0.0541-0.0557-0.355-0.05710.2773
M-score -2.50-2.76-2.80-2.50-2.89-2.77-2.65-4.43-3.06-0.69

Dean Foods Co Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.04311.10851.29871.0561.25070.94020.75641.05360.81551.0873
GMI 1.02570.98610.93411.02261.07531.12681.1891.13521.14041.1725
AQI 0.66650.67610.98770.29930.9370.38990.43261.89040.45951.0737
SGI 0.93860.82810.71440.84160.80440.8860.99480.92030.98321.0021
DEPI 1.11051.30851.45720.90791.27430.68890.63431.04030.68721.0927
SGAI 1.00681.04311.10250.95440.92310.88440.84170.9050.92530.9239
LVGI 1.30321.30010.96850.94160.76470.78330.73810.72240.94030.9297
TATA -0.3467-0.3709-0.0924-0.05710.04760.16950.2120.27730.04770.027
M-score -4.33-4.48-2.89-3.09-2.07-1.97-1.78-0.66-2.59-2.10
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