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Flowers Foods Inc (NYSE:FLO)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

FLO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.52   Max: -2.09
Current: -2.71

-3.52
-2.09

During the past 13 years, the highest Beneish M-Score of Flowers Foods Inc was -2.09. The lowest was -3.52. And the median was -2.74.


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 * 1.0371+0.528 * 0.9802+0.404 * 1.1381+0.892 * 1.0272+0.115 * 0.9443
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.033+4.679 * -0.0688-0.327 * 0.9875
=-2.71

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $268 Mil.
Revenue was 885.302 + 888.795 + 1146.045 + 877.333 = $3,797 Mil.
Gross Profit was 421.257 + 431.542 + 560.129 + 423.574 = $1,837 Mil.
Total Current Assets was $513 Mil.
Total Assets was $2,752 Mil.
Property, Plant and Equipment(Net PPE) was $785 Mil.
Depreciation, Depletion and Amortization(DDA) was $130 Mil.
Selling, General & Admin. Expense(SGA) was $1,411 Mil.
Total Current Liabilities was $382 Mil.
Long-Term Debt was $844 Mil.
Net Income was 43.796 + 51.76 + 61.389 + 28.01 = $185 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 64.608 + 97.511 + 118.423 + 93.728 = $374 Mil.
Accounts Receivable was $251 Mil.
Revenue was 844.932 + 872.791 + 1153.917 + 825.161 = $3,697 Mil.
Gross Profit was 401.954 + 414.772 + 558.04 + 377.65 = $1,752 Mil.
Total Current Assets was $505 Mil.
Total Assets was $2,477 Mil.
Property, Plant and Equipment(Net PPE) was $822 Mil.
Depreciation, Depletion and Amortization(DDA) was $127 Mil.
Selling, General & Admin. Expense(SGA) was $1,329 Mil.
Total Current Liabilities was $336 Mil.
Long-Term Debt was $781 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)
=(267.762 / 3797.475) / (251.349 / 3696.801)
=0.07051054 / 0.06799095
=1.0371

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)
=(431.542 / 3696.801) / (421.257 / 3797.475)
=0.47403579 / 0.48361135
=0.9802

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 - (513.277 + 784.612) / 2752.243) / (1 - (505.062 + 821.954) / 2477.204)
=0.528425 / 0.46430895
=1.1381

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
=3797.475 / 3696.801
=1.0272

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))
=(127.408 / (127.408 + 821.954)) / (129.979 / (129.979 + 784.612))
=0.13420381 / 0.14211708
=0.9443

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)
=(1410.667 / 3797.475) / (1329.456 / 3696.801)
=0.37147499 / 0.35962336
=1.033

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)
=((843.643 + 381.922) / 2752.243) / ((780.969 + 336.084) / 2477.204)
=0.4452968 / 0.45093299
=0.9875

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
=(184.955 - 0 - 374.27) / 2752.243
=-0.0688

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 -2.71 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 0.92720.99220.96811.09080.93180.94031.03591.25680.8090.9249
GMI 0.99941.00141.0151.02781.02390.97641.01690.99970.99430.9832
AQI 0.9961.16221.06371.30290.99191.01251.02661.28021.13751.0316
SGI 1.10611.10071.07841.18571.0770.98961.07751.09851.22521.0044
DEPI 0.98580.95511.01611.07760.93740.95951.01720.97881.03080.8731
SGAI 0.99370.99170.9620.95790.96131.0211.00780.99180.99991.0154
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 -2.84-2.71-2.91-2.20-2.78-3.08-2.51-2.32-2.50-2.79

Flowers Foods Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.09130.97170.8090.87730.92110.93180.92490.96460.98881.0371
GMI 0.97050.97510.99431.00451.00921.00460.98320.98090.97610.9802
AQI 1.55171.07941.13751.08051.07961.03651.03161.00861.00111.1381
SGI 1.20181.23941.22521.14541.06711.01091.00440.99611.00721.0272
DEPI 0.95321.04951.03081.00980.9940.85410.87310.91020.93640.9443
SGAI 0.99921.00520.99991.00331.0010.98251.01541.01941.01911.033
LVGI 1.00311.10181.09291.06231.1060.92150.88970.92170.90790.9875
TATA -0.0173-0.0096-0.0158-0.0507-0.0371-0.034-0.0574-0.0555-0.0705-0.0688
M-score -2.10-2.35-2.50-2.69-2.66-2.66-2.79-2.77-2.81-2.71
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