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Dean Foods Co (NYSE:DF)
Beneish M-Score
-3.59 (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 -3.59 suggests that the company is not a manipulator.

DF' s Beneish M-Score Range Over the Past 10 Years
Min: -4.48   Max: 0.86
Current: -3.59

-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 * 0.9526+0.528 * 0.7946+0.404 * 0.8191+0.892 * 0.9033+0.115 * 0.9252
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1608+4.679 * -0.1627-0.327 * 1.0113
=-3.59

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $668 Mil.
Revenue was 2033.693 + 2014.706 + 2050.762 + 2395.007 = $8,494 Mil.
Gross Profit was 491.988 + 495.641 + 478.309 + 441.4 = $1,907 Mil.
Total Current Assets was $1,069 Mil.
Total Assets was $2,497 Mil.
Property, Plant and Equipment(Net PPE) was $1,138 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $1,703 Mil.
Total Current Liabilities was $758 Mil.
Long-Term Debt was $839 Mil.
Net Income was 20.233 + 26.519 + -73.74 + 5.277 = $-22 Mil.
Non Operating Income was 0.964 + 0.294 + -43.163 + -0.577 = $-42 Mil.
Cash Flow from Operations was 50.257 + 114.192 + 157.579 + 104.875 = $427 Mil.
Accounts Receivable was $777 Mil.
Revenue was 2373.28 + 2393.869 + 2341.04 + 2295.45 = $9,404 Mil.
Gross Profit was 416.8 + 399.088 + 416.175 + 445.77 = $1,678 Mil.
Total Current Assets was $1,214 Mil.
Total Assets was $2,790 Mil.
Property, Plant and Equipment(Net PPE) was $1,181 Mil.
Depreciation, Depletion and Amortization(DDA) was $165 Mil.
Selling, General & Admin. Expense(SGA) was $1,624 Mil.
Total Current Liabilities was $788 Mil.
Long-Term Debt was $978 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)
=(668.329 / 8494.168) / (776.741 / 9403.639)
=0.07868093 / 0.08260004
=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)
=(495.641 / 9403.639) / (491.988 / 8494.168)
=0.1784238 / 0.22454677
=0.7946

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 - (1069.006 + 1137.991) / 2496.811) / (1 - (1213.558 + 1180.99) / 2789.89)
=0.11607366 / 0.14170523
=0.8191

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
=8494.168 / 9403.639
=0.9033

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))
=(164.827 / (164.827 + 1180.99)) / (173.623 / (173.623 + 1137.991))
=0.12247356 / 0.13237355
=0.9252

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)
=(1702.74 / 8494.168) / (1623.902 / 9403.639)
=0.20045989 / 0.17268868
=1.1608

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)
=((839.374 + 758.196) / 2496.811) / ((977.516 + 787.614) / 2789.89)
=0.63984419 / 0.63268803
=1.0113

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
=(-21.711 - -42.482 - 426.903) / 2496.811
=-0.1627

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 -3.59 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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.94020.75641.05360.81551.08731.0640.9430.84060.80330.9526
GMI 1.12681.1891.13521.14041.17251.17551.16811.03970.88910.7946
AQI 0.38990.43261.89040.45951.07370.960.96910.85630.83180.8191
SGI 0.8860.99480.92030.98321.00211.02481.0541.01630.95690.9033
DEPI 0.68890.63431.04030.68721.09271.07561.01770.9960.9510.9252
SGAI 0.88440.84170.9050.92530.92390.92760.94620.99771.08031.1608
LVGI 0.78330.73810.72240.94030.92971.01131.03180.99990.99851.0113
TATA 0.16950.2120.27730.04770.0270.0085-0.0626-0.1271-0.1652-0.1627
M-score -1.97-1.78-0.66-2.59-2.10-2.27-2.70-3.24-3.62-3.59
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