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Flowers Foods Inc (NYSE:FLO)
Beneish M-Score
-2.80 (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.

Flowers Foods Inc has a M-score of -2.80 suggests that the company is not a manipulator.

FLO' s 10-Year Beneish M-Score Range
Min: -3.61   Max: -2.09
Current: -2.8

-3.61
-2.09

During the past 13 years, the highest Beneish M-Score of Flowers Foods Inc was -2.09. The lowest was -3.61. And the median was -2.75.


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 Flowers Foods Inc 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 * 0.9916+0.528 * 0.979+0.404 * 1.0011+0.892 * 1.0044+0.115 * 0.9364
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0143+4.679 * -0.0705-0.327 * 0.9079
=-2.80

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $261 Mil.
Revenue was 888.795 + 1146.045 + 862.475 + 849.36 = $3,747 Mil.
Gross Profit was 431.542 + 560.129 + 408.716 + 406.382 = $1,807 Mil.
Total Current Assets was $516 Mil.
Total Assets was $2,428 Mil.
Property, Plant and Equipment(Net PPE) was $777 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General & Admin. Expense(SGA) was $1,380 Mil.
Total Current Liabilities was $344 Mil.
Long-Term Debt was $659 Mil.
Net Income was 51.76 + 61.389 + 28.01 + 44.599 = $186 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 97.511 + 118.423 + 93.728 + 47.331 = $357 Mil.
Accounts Receivable was $262 Mil.
Revenue was 872.791 + 1153.917 + 825.161 + 878.492 = $3,730 Mil.
Gross Profit was 414.772 + 558.04 + 377.65 + 410.694 = $1,761 Mil.
Total Current Assets was $501 Mil.
Total Assets was $2,484 Mil.
Property, Plant and Equipment(Net PPE) was $824 Mil.
Depreciation, Depletion and Amortization(DDA) was $128 Mil.
Selling, General & Admin. Expense(SGA) was $1,355 Mil.
Total Current Liabilities was $339 Mil.
Long-Term Debt was $792 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)
=(260.864 / 3746.675) / (261.939 / 3730.361)
=0.06962547 / 0.07021814
=0.9916

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)
=(560.129 / 3730.361) / (431.542 / 3746.675)
=0.47211409 / 0.48223265
=0.979

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 - (516.332 + 777.473) / 2427.627) / (1 - (500.813 + 824.302) / 2484.087)
=0.46704951 / 0.46655854
=1.0011

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
=3746.675 / 3730.361
=1.0044

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))
=(127.758 / (127.758 + 824.302)) / (130.047 / (130.047 + 777.473))
=0.13419112 / 0.14329932
=0.9364

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)
=(1380.236 / 3746.675) / (1354.899 / 3730.361)
=0.36838957 / 0.36320855
=1.0143

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)
=((659.094 + 344.304) / 2427.627) / ((791.791 + 339.142) / 2484.087)
=0.41332462 / 0.45527109
=0.9079

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
=(185.758 - 0 - 356.993) / 2427.627
=-0.0705

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.

Flowers Foods Inc has a M-score of -2.80 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.

Flowers Foods Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.92720.99220.96811.09080.93180.94031.03591.25680.8050.9294
GMI 0.99941.00141.0151.02781.02390.97641.01690.99970.98890.9886
AQI 0.9961.16221.06371.30290.99191.01251.02661.28021.13751.0316
SGI 1.10611.10071.07841.18571.0770.98961.07751.09851.23130.9995
DEPI 0.98580.95511.01611.07760.93740.95951.01720.97881.03080.8731
SGAI 0.99370.99170.9620.95790.96131.0211.00780.99181.00851.0068
LVGI 1.19780.9980.82011.63450.84750.77811.37771.25571.09290.8897
TATA -0.0694-0.0809-0.12150.018-0.0782-0.1275-0.007-0.0405-0.0158-0.0574
M-score -2.84-2.71-2.91-2.20-2.78-3.08-2.51-2.32-2.51-2.79

Flowers Foods Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.16541.09130.97170.8090.87730.92110.93070.92740.96730.9916
GMI 0.97720.97050.97510.99431.00451.00921.00330.98620.98390.979
AQI 1.52771.55171.07941.13751.08051.07961.03651.03161.00861.0011
SGI 1.14261.20181.23941.22521.14541.06711.01211.00160.99331.0044
DEPI 0.96270.95321.04951.03081.00980.9940.85410.87310.91020.9364
SGAI 0.99380.99921.00520.99991.00331.0010.98461.01061.01451.0143
LVGI 1.03571.00311.10181.09291.06231.1060.92150.88970.92170.9079
TATA -0.0155-0.0173-0.0096-0.0158-0.0507-0.0371-0.034-0.0574-0.0555-0.0705
M-score -2.09-2.10-2.35-2.50-2.69-2.66-2.66-2.79-2.77-2.80
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