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Dean Foods Co (NYSE:DF)
Beneish M-Score
-2.75 (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 -2.75 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: -2.75

-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 -2.63.


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 * 1.0672+0.528 * 0.8685+0.404 * 1.3528+0.892 * 0.9082+0.115 * 0.9854
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1085+4.679 * -0.0668-0.327 * 0.9602
=-2.75

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $648 Mil.
Revenue was 1964.601 + 1848.788 + 1878.828 + 2022.5 = $7,715 Mil.
Gross Profit was 488.775 + 493.253 + 504.068 + 508.471 = $1,995 Mil.
Total Current Assets was $1,020 Mil.
Total Assets was $2,568 Mil.
Property, Plant and Equipment(Net PPE) was $1,145 Mil.
Depreciation, Depletion and Amortization(DDA) was $178 Mil.
Selling, General & Admin. Expense(SGA) was $1,714 Mil.
Total Current Liabilities was $682 Mil.
Long-Term Debt was $895 Mil.
Net Income was 14.526 + 33.371 + 39.201 + 18.48 = $106 Mil.
Non Operating Income was 1.178 + 2.21 + 0.997 + 2.047 = $6 Mil.
Cash Flow from Operations was 59.299 + 79.089 + 46.23 + 86.125 = $271 Mil.
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.



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)
=(647.78 / 7714.717) / (668.329 / 8494.168)
=0.08396679 / 0.07868093
=1.0672

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)
=(1907.338 / 8494.168) / (1994.567 / 7714.717)
=0.22454677 / 0.25854053
=0.8685

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 - (1019.742 + 1144.733) / 2567.652) / (1 - (1069.006 + 1137.991) / 2496.811)
=0.15702167 / 0.11607366
=1.3528

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
=7714.717 / 8494.168
=0.9082

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))
=(173.623 / (173.623 + 1137.991)) / (177.646 / (177.646 + 1144.733))
=0.13237355 / 0.13433819
=0.9854

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)
=(1714.356 / 7714.717) / (1702.74 / 8494.168)
=0.22221891 / 0.20045989
=1.1085

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)
=((895.015 + 682.428) / 2567.652) / ((839.374 + 758.196) / 2496.811)
=0.61435233 / 0.63984419
=0.9602

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
=(105.578 - 6.432 - 270.743) / 2567.652
=-0.0668

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 -2.75 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 local exchange's currency.

Dean Foods Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.98370.97610.88881.16821.02681.09110.9310.99741.02420.9526
GMI 0.93571.17160.97920.84641.09681.180.95561.09831.16810.7244
AQI 0.96910.9891.00820.98330.96970.54250.29931.89040.96910.7076
SGI 0.99251.17071.05350.89230.97360.89790.95460.97211.0540.8546
DEPI 0.95360.98950.98861.07211.0291.17130.68731.04031.01770.9387
SGAI 1.05710.88871.02141.18811.01680.88880.99470.92520.94621.2312
LVGI 1.00821.41330.90550.87540.96261.31290.94160.72241.03181.0245
TATA -0.0495-0.0303-0.0757-0.0541-0.0537-0.3504-0.05710.2773-0.0626-0.1495
M-score -2.80-2.52-2.87-2.75-2.68-4.28-3.17-0.69-2.63-3.67

Dean Foods Co Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.08731.0641.02420.84060.80330.95260.95261.04681.11341.0672
GMI 1.17251.17551.16811.03970.88910.79460.72440.74880.80810.8685
AQI 1.07370.960.96910.85630.83180.81910.70760.83781.33591.3528
SGI 1.00211.02481.0541.01630.95690.90330.85460.86290.88110.9082
DEPI 1.09271.07561.01770.9960.9510.92520.93870.90080.96870.9854
SGAI 0.92390.92760.94620.99771.08031.16081.23121.20381.161.1085
LVGI 0.92971.01131.03180.99990.99851.01131.02450.98280.98450.9602
TATA 0.0270.0085-0.0626-0.1271-0.1652-0.1627-0.1495-0.0802-0.0617-0.0668
M-score -2.10-2.27-2.63-3.24-3.62-3.59-3.67-3.17-2.76-2.75
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