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Flowers Foods Inc (NYSE:FLO)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

FLO' s 10-Year Beneish M-Score Range
Min: -3.08   Max: -2.22
Current: -2.79

-3.08
-2.22

During the past 13 years, the highest Beneish M-Score of Flowers Foods Inc was -2.22. The lowest was -3.08. 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 * 0.9249+0.528 * 0.9832+0.404 * 1.0316+0.892 * 1.0044+0.115 * 0.8731
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0154+4.679 * -0.0574-0.327 * 0.8897
=-2.79

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $236 Mil.
Revenue was 862.475 + 849.36 + 877.378 + 1159.76 = $3,749 Mil.
Gross Profit was 408.716 + 406.382 + 419.359 + 563.883 = $1,798 Mil.
Total Current Assets was $461 Mil.
Total Assets was $2,409 Mil.
Property, Plant and Equipment(Net PPE) was $807 Mil.
Depreciation, Depletion and Amortization(DDA) was $129 Mil.
Selling, General & Admin. Expense(SGA) was $1,384 Mil.
Total Current Liabilities was $316 Mil.
Long-Term Debt was $729 Mil.
Net Income was 28.01 + 44.599 + 42.064 + 61.066 = $176 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 93.728 + 47.331 + 51.09 + 121.821 = $314 Mil.
Accounts Receivable was $254 Mil.
Revenue was 825.161 + 878.492 + 898.153 + 1130.81 = $3,733 Mil.
Gross Profit was 377.65 + 410.694 + 426.539 + 545.512 = $1,760 Mil.
Total Current Assets was $487 Mil.
Total Assets was $2,504 Mil.
Property, Plant and Equipment(Net PPE) was $867 Mil.
Depreciation, Depletion and Amortization(DDA) was $118 Mil.
Selling, General & Admin. Expense(SGA) was $1,357 Mil.
Total Current Liabilities was $328 Mil.
Long-Term Debt was $892 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)
=(235.911 / 3748.973) / (253.967 / 3732.616)
=0.06292683 / 0.06803995
=0.9249

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)
=(406.382 / 3732.616) / (408.716 / 3748.973)
=0.47162499 / 0.4796887
=0.9832

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 - (460.563 + 807.458) / 2408.974) / (1 - (487.405 + 867.004) / 2504.014)
=0.47362612 / 0.45910486
=1.0316

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
=3748.973 / 3732.616
=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))
=(118.491 / (118.491 + 867.004)) / (128.961 / (128.961 + 807.458))
=0.12023501 / 0.1377172
=0.8731

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)
=(1383.676 / 3748.973) / (1356.742 / 3732.616)
=0.36908135 / 0.36348288
=1.0154

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)
=((728.94 + 315.553) / 2408.974) / ((892.478 + 327.782) / 2504.014)
=0.43358417 / 0.48732156
=0.8897

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
=(175.739 - 0 - 313.97) / 2408.974
=-0.0574

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 -2.79 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.04581.25681.16541.09130.97170.8090.87590.92530.92810.9249
GMI 1.02020.99970.97720.97050.97510.99431.00281.00611.00020.9832
AQI 1.34681.28021.52771.55171.07941.13751.08051.07961.03651.0316
SGI 1.09571.09851.14261.20181.23941.22521.14711.07011.0151.0044
DEPI 0.95660.97880.96270.95321.04951.03081.00980.9940.85410.8731
SGAI 0.99440.99180.99380.99921.00520.99991.0061.00590.98951.0154
LVGI 1.15521.25571.03571.00311.10181.09291.06231.1060.92150.8897
TATA -0.0519-0.0405-0.0155-0.0173-0.0096-0.0158-0.0507-0.0371-0.034-0.0574
M-score -2.50-2.32-2.09-2.10-2.35-2.50-2.69-2.66-2.67-2.79
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