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Dean Foods Co (NYSE:DF)
Beneish M-Score
-3.17 (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 -3.17 suggests that the company is not a manipulator.

DF' s Beneish M-Score Range Over the Past 10 Years
Min: -4.28   Max: 0.82
Current: -3.17

-4.28
0.82

During the past 13 years, the highest Beneish M-Score of Dean Foods Co was 0.82. The lowest was -4.28. And the median was -2.62.


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 * 1.0468+0.528 * 0.7488+0.404 * 0.8378+0.892 * 0.8629+0.115 * 0.9008
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2038+4.679 * -0.0802-0.327 * 0.9828
=-3.17

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $598 Mil.
Revenue was 1878.828 + 2022.5 + 2033.693 + 2014.706 = $7,950 Mil.
Gross Profit was 504.068 + 508.471 + 491.988 + 495.641 = $2,000 Mil.
Total Current Assets was $1,046 Mil.
Total Assets was $2,452 Mil.
Property, Plant and Equipment(Net PPE) was $1,149 Mil.
Depreciation, Depletion and Amortization(DDA) was $183 Mil.
Selling, General & Admin. Expense(SGA) was $1,722 Mil.
Total Current Liabilities was $668 Mil.
Long-Term Debt was $834 Mil.
Net Income was 39.201 + 18.48 + 20.233 + 26.519 = $104 Mil.
Non Operating Income was 0.997 + 2.047 + 0.964 + 0.294 = $4 Mil.
Cash Flow from Operations was 46.23 + 86.125 + 50.257 + 114.192 = $297 Mil.
Accounts Receivable was $662 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.



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)
=(598.264 / 7949.727) / (662.338 / 9212.918)
=0.07525592 / 0.07189231
=1.0468

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)
=(508.471 / 9212.918) / (504.068 / 7949.727)
=0.18838733 / 0.2516021
=0.7488

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 - (1046.289 + 1149.254) / 2452.354) / (1 - (1040.789 + 1158.55) / 2513.507)
=0.1047202 / 0.12499189
=0.8378

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
=7949.727 / 9212.918
=0.8629

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))
=(163.309 / (163.309 + 1158.55)) / (182.664 / (182.664 + 1149.254))
=0.12354495 / 0.13714358
=0.9008

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)
=(1722.019 / 7949.727) / (1657.779 / 9212.918)
=0.2166136 / 0.17994071
=1.2038

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)
=((833.704 + 668.005) / 2452.354) / ((852.238 + 713.865) / 2513.507)
=0.61235409 / 0.62307485
=0.9828

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
=(104.433 - 4.302 - 296.804) / 2452.354
=-0.0802

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 -3.17 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 1.01570.99530.87171.16350.92020.90971.01231.23261.02420.9526
GMI 0.90741.17160.97920.84681.12621.07280.91361.231.16810.7244
AQI 0.96910.9891.00820.98330.96970.54250.29931.89040.96910.726
SGI 0.96131.17071.05350.89591.08641.07690.8780.78661.0540.8546
DEPI 0.980.98950.98861.06830.93610.89840.74361.38281.01770.9387
SGAI 1.10680.88871.02141.18890.95050.94261.09250.84910.94621.2312
LVGI 1.00821.41330.90550.87540.96261.31290.94160.72241.03181.0264
TATA -0.0495-0.0303-0.0757-0.0539-0.0557-0.3522-0.04960.2773-0.0626-0.1491
M-score -2.82-2.50-2.89-2.75-2.67-4.39-3.16-0.52-2.63-3.66

Dean Foods Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.05360.81551.08731.0641.02420.84060.80330.95260.95261.0468
GMI 1.13521.14041.17251.17551.16811.03970.88910.79460.72440.7488
AQI 1.89040.45951.07370.960.96910.85630.83180.81910.7260.8378
SGI 0.92030.98321.00211.02481.0541.01630.95690.90330.85460.8629
DEPI 1.04030.68721.09271.07561.01770.9960.9510.92520.93870.9008
SGAI 0.9050.92530.92390.92760.94620.99771.08031.16081.23121.2038
LVGI 0.72240.94030.92971.01131.03180.99990.99851.01131.02640.9828
TATA 0.27730.04770.0270.0085-0.0626-0.1271-0.1652-0.1627-0.1491-0.0802
M-score -0.66-2.59-2.10-2.27-2.63-3.24-3.62-3.59-3.66-3.17
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