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Dean Foods Co (NYSE:DF)
Beneish M-Score
-3.25 (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 -3.25 suggests that the company is not a manipulator.

DF' s 10-Year Beneish M-Score Range
Min: -4.48   Max: 0.86
Current: -3.25

-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 * 0.8315+0.528 * 1.0397+0.404 * 0.8563+0.892 * 1.0163+0.115 * 0.996
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9977+4.679 * -0.1271-0.327 * 0.9999
=-3.25

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $655 Mil.
Revenue was 2050.762 + 2395.007 + 2373.28 + 2393.869 = $9,213 Mil.
Gross Profit was 478.309 + 441.4 + 416.8 + 399.088 = $1,736 Mil.
Total Current Assets was $1,041 Mil.
Total Assets was $2,514 Mil.
Property, Plant and Equipment(Net PPE) was $1,159 Mil.
Depreciation, Depletion and Amortization(DDA) was $163 Mil.
Selling, General & Admin. Expense(SGA) was $1,658 Mil.
Total Current Liabilities was $714 Mil.
Long-Term Debt was $852 Mil.
Net Income was -73.74 + 5.277 + -15.972 + -0.645 = $-85 Mil.
Non Operating Income was -43.163 + -0.577 + 0.487 + -0.048 = $-43 Mil.
Cash Flow from Operations was 157.579 + 104.875 + 22.803 + -7.531 = $278 Mil.
Accounts Receivable was $775 Mil.
Revenue was 2341.04 + 2295.45 + 2200.899 + 2227.542 = $9,065 Mil.
Gross Profit was 416.175 + 445.77 + 441.285 + 472.3 = $1,776 Mil.
Total Current Assets was $1,243 Mil.
Total Assets was $2,863 Mil.
Property, Plant and Equipment(Net PPE) was $1,203 Mil.
Depreciation, Depletion and Amortization(DDA) was $169 Mil.
Selling, General & Admin. Expense(SGA) was $1,635 Mil.
Total Current Liabilities was $822 Mil.
Long-Term Debt was $963 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)
=(655.135 / 9212.918) / (775.268 / 9064.931)
=0.07111048 / 0.08552387
=0.8315

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)
=(441.4 / 9064.931) / (478.309 / 9212.918)
=0.19586801 / 0.18838733
=1.0397

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 - (1040.789 + 1158.55) / 2513.507) / (1 - (1242.705 + 1202.754) / 2863.442)
=0.12499189 / 0.14597223
=0.8563

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
=9212.918 / 9064.931
=1.0163

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))
=(168.771 / (168.771 + 1202.754)) / (163.309 / (163.309 + 1158.55))
=0.12305354 / 0.12354495
=0.996

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)
=(1657.779 / 9212.918) / (1634.915 / 9064.931)
=0.17994071 / 0.18035603
=0.9977

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)
=((852.238 + 713.865) / 2513.507) / ((962.657 + 821.694) / 2863.442)
=0.62307485 / 0.62314899
=0.9999

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
=(-85.08 - -43.301 - 277.726) / 2513.507
=-0.1271

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 -3.25 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.0561.25070.94020.75641.05360.81551.08731.0640.9430.8315
GMI 1.02261.07531.12681.1891.13521.14041.17251.17551.16811.0397
AQI 0.29930.9370.38990.43261.89040.45951.07370.960.96910.8563
SGI 0.84160.80440.8860.99480.92030.98321.00211.02481.0541.0163
DEPI 0.90791.27430.68890.63431.04030.68721.09271.07561.01770.996
SGAI 0.95440.92310.88440.84170.9050.92530.92390.92760.94620.9977
LVGI 0.94160.76470.78330.73810.72240.94030.92971.01131.03180.9999
TATA -0.05710.04760.16950.2120.27730.04770.0270.0085-0.0626-0.1271
M-score -3.09-2.07-1.97-1.78-0.66-2.59-2.10-2.27-2.70-3.25
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