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Dean Foods Co (NYSE:DF)
Beneish M-Score
-2.27 (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 -2.27 suggests that the company is not a manipulator.

DF' s 10-Year Beneish M-Score Range
Min: -4.48   Max: 0.86
Current: -2.27

-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 * 1.064+0.528 * 1.1755+0.404 * 0.96+0.892 * 1.0248+0.115 * 1.0756
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9276+4.679 * 0.0085-0.327 * 1.0113
=-2.27

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
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.
Net Income was -15.972 + -0.645 + -8.956 + -37.677 = $-63 Mil.
Non Operating Income was 0.487 + -0.048 + 0.321 + -63.476 = $-63 Mil.
Cash Flow from Operations was 22.803 + -7.531 + 32.799 + -72.187 = $-24 Mil.
Accounts Receivable was $712 Mil.
Revenue was 2200.899 + 2227.542 + 2292.43 + 2455.13 = $9,176 Mil.
Gross Profit was 441.285 + 472.3 + 495.232 + 515.803 = $1,925 Mil.
Total Current Assets was $1,425 Mil.
Total Assets was $3,049 Mil.
Property, Plant and Equipment(Net PPE) was $1,174 Mil.
Depreciation, Depletion and Amortization(DDA) was $178 Mil.
Selling, General & Admin. Expense(SGA) was $1,708 Mil.
Total Current Liabilities was $876 Mil.
Long-Term Debt was $1,032 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)
=(776.741 / 9403.639) / (712.371 / 9176.001)
=0.08260004 / 0.07763415
=1.064

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)
=(399.088 / 9176.001) / (416.8 / 9403.639)
=0.20974496 / 0.1784238
=1.1755

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 - (1213.558 + 1180.99) / 2789.89) / (1 - (1424.99 + 1173.649) / 3048.638)
=0.14170523 / 0.14760657
=0.96

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
=9403.639 / 9176.001
=1.0248

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))
=(178.065 / (178.065 + 1173.649)) / (164.827 / (164.827 + 1180.99))
=0.13173275 / 0.12247356
=1.0756

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)
=(1623.902 / 9403.639) / (1708.21 / 9176.001)
=0.17268868 / 0.18616062
=0.9276

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)
=((977.516 + 787.614) / 2789.89) / ((1031.643 + 875.674) / 3048.638)
=0.63268803 / 0.62562922
=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
=(-63.25 - -62.716 - -24.116) / 2789.89
=0.0085

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 -2.27 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

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

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.10851.29871.0561.25070.94020.75641.05360.81551.08731.064
GMI 0.98610.93411.02261.07531.12681.1891.13521.14041.17251.1755
AQI 0.67610.98770.29930.9370.38990.43261.89040.45951.07370.96
SGI 0.82810.71440.84160.80440.8860.99480.92030.98321.00211.0248
DEPI 1.30851.45720.90791.27430.68890.63431.04030.68721.09271.0756
SGAI 1.04311.10250.95440.92310.88440.84170.9050.92530.92390.9276
LVGI 1.30010.96850.94160.76470.78330.73810.72240.94030.92971.0113
TATA -0.3709-0.0924-0.05710.04760.16950.2120.27730.04770.0270.0085
M-score -4.48-2.89-3.09-2.07-1.97-1.78-0.66-2.59-2.10-2.27
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