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Flowers Foods Inc (NYSE:FLO)
Beneish M-Score
-2.69 (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 -2.69 suggests that the company is not a manipulator.

FLO' s 10-Year Beneish M-Score Range
Min: -3.61   Max: -2.09
Current: -2.69

-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 -2.74.


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 * 0.8717+0.528 * 0.9974+0.404 * 1.0805+0.892 * 1.1527+0.115 * 1.0098
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0145+4.679 * -0.0507-0.327 * 1.0623
=-2.69

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $269 Mil.
Revenue was 1159.76 + 843.55 + 878.492 + 898.153 = $3,780 Mil.
Gross Profit was 563.883 + 396.039 + 410.694 + 426.539 = $1,797 Mil.
Total Current Assets was $478 Mil.
Total Assets was $2,477 Mil.
Property, Plant and Equipment(Net PPE) was $840 Mil.
Depreciation, Depletion and Amortization(DDA) was $124 Mil.
Selling, General & Admin. Expense(SGA) was $1,390 Mil.
Total Current Liabilities was $325 Mil.
Long-Term Debt was $811 Mil.
Net Income was 61.066 + 38.52 + 33.888 + 46.46 = $180 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 121.821 + 50.224 + 44.658 + 88.773 = $305 Mil.
Accounts Receivable was $267 Mil.
Revenue was 1130.81 + 749.442 + 717.282 + 681.561 = $3,279 Mil.
Gross Profit was 545.512 + 358.776 + 334.774 + 315.903 = $1,555 Mil.
Total Current Assets was $505 Mil.
Total Assets was $2,161 Mil.
Property, Plant and Equipment(Net PPE) was $720 Mil.
Depreciation, Depletion and Amortization(DDA) was $107 Mil.
Selling, General & Admin. Expense(SGA) was $1,189 Mil.
Total Current Liabilities was $332 Mil.
Long-Term Debt was $601 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)
=(268.761 / 3779.955) / (267.472 / 3279.095)
=0.07110164 / 0.08156885
=0.8717

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)
=(396.039 / 3279.095) / (563.883 / 3779.955)
=0.47420554 / 0.47544349
=0.9974

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 - (477.684 + 840.286) / 2477.131) / (1 - (504.583 + 720.291) / 2160.598)
=0.46794497 / 0.43308565
=1.0805

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
=3779.955 / 3279.095
=1.1527

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))
=(107.14 / (107.14 + 720.291)) / (123.594 / (123.594 + 840.286))
=0.12948512 / 0.12822551
=1.0098

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)
=(1390.082 / 3779.955) / (1188.647 / 3279.095)
=0.36775094 / 0.3624924
=1.0145

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)
=((810.988 + 325.189) / 2477.131) / ((600.527 + 332.328) / 2160.598)
=0.4586665 / 0.43175778
=1.0623

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
=(179.934 - 0 - 305.476) / 2477.131
=-0.0507

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 -2.69 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.10970.92720.99220.96811.09080.93180.94031.03591.25680.805
GMI 1.01370.99941.00141.0151.02781.02390.97641.01690.99970.9889
AQI 1.08720.9961.16221.06371.30290.99191.01251.02661.28021.1375
SGI 1.06771.10611.10071.07841.18571.0770.98961.07751.09851.2313
DEPI 0.970.98580.95511.01611.07760.93740.95951.01720.97881.0308
SGAI 0.98630.99370.99170.9620.95790.96131.0211.00780.99181.0085
LVGI 1.19461.19780.9980.82011.63450.84750.77811.37771.25571.0929
TATA -0.0926-0.0694-0.0809-0.12150.018-0.0782-0.1275-0.007-0.0405-0.0158
M-score -2.77-2.84-2.71-2.91-2.20-2.78-3.08-2.51-2.32-2.51

Flowers Foods Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.03591.02170.9261.04581.25681.16541.09130.97170.8050.8717
GMI 1.01691.03391.03181.02020.99970.97720.97050.97510.98890.9974
AQI 1.02660.93220.89011.34681.28021.52771.55171.07941.13751.0805
SGI 1.07751.11211.11211.09571.09851.14261.20181.23941.23131.1527
DEPI 1.01721.02030.87990.95660.97880.96270.95321.04951.03081.0098
SGAI 1.00780.99760.9870.99440.99180.99380.99921.00521.00851.0145
LVGI 1.37771.58641.1151.15521.25571.03571.00311.10181.09291.0623
TATA -0.007-0.0009-0.0425-0.0519-0.0405-0.0155-0.0173-0.0096-0.0158-0.0507
M-score -2.51-2.56-2.72-2.50-2.32-2.09-2.10-2.35-2.51-2.69
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