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Flowers Foods, Inc. (NYSE:FLO)
Beneish M-Score
-2.50 (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 -2.50 suggests that the company is not a manipulator.

FLO' s 10-Year Beneish M-Score Range
Min: -3.08   Max: -2.22
Current: -2.5

-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 -2.72.


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 * 0.805+0.528 * 0.9889+0.404 * 1.1375+0.892 * 1.2313+0.115 * 1.0308
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0085+4.679 * -0.0153-0.327 * 1.0929
=-2.50

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $254 Mil.
Revenue was 843.55 + 878.492 + 898.153 + 1130.81 = $3,751 Mil.
Gross Profit was 396.039 + 410.694 + 426.539 + 545.512 = $1,779 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 $1,375 Mil.
Total Current Liabilities was $328 Mil.
Long-Term Debt was $892 Mil.
Net Income was 38.52 + 33.888 + 46.46 + 113.275 = $232 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 50.224 + 44.658 + 88.773 + 86.829 = $270 Mil.
Accounts Receivable was $256 Mil.
Revenue was 749.442 + 717.282 + 681.561 + 898.206 = $3,046 Mil.
Gross Profit was 358.776 + 334.774 + 315.903 + 419.228 = $1,429 Mil.
Total Current Assets was $464 Mil.
Total Assets was $1,996 Mil.
Property, Plant and Equipment(Net PPE) was $726 Mil.
Depreciation, Depletion and Amortization(DDA) was $103 Mil.
Selling, General & Admin. Expense(SGA) was $1,107 Mil.
Total Current Liabilities was $355 Mil.
Long-Term Debt was $535 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)
=(253.967 / 3751.005) / (256.235 / 3046.491)
=0.06770639 / 0.08410824
=0.805

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)
=(410.694 / 3046.491) / (396.039 / 3751.005)
=0.46895953 / 0.47421531
=0.9889

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 - (487.405 + 867.004) / 2504.014) / (1 - (464.451 + 725.836) / 1995.849)
=0.45910486 / 0.40361871
=1.1375

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
=3751.005 / 3046.491
=1.2313

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))
=(102.69 / (102.69 + 725.836)) / (118.491 / (118.491 + 867.004))
=0.123943 / 0.12023501
=1.0308

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)
=(1375.131 / 3751.005) / (1107.48 / 3046.491)
=0.36660335 / 0.36352643
=1.0085

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)
=((892.478 + 327.782) / 2504.014) / ((535.016 + 354.958) / 1995.849)
=0.48732156 / 0.44591249
=1.0929

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
=(232.143 - 0 - 270.484) / 2504.014
=-0.0153

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 -2.50 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.04481.03591.02170.9261.04581.25681.16541.09130.97170.805
GMI 1.00141.01691.03391.03181.02020.99970.97720.97050.97510.9889
AQI 1.01321.02660.93220.89011.34681.28021.52771.55171.07941.1375
SGI 1.04481.07751.11211.11211.09571.09851.14261.20181.23941.2313
DEPI 1.07271.01721.02030.87990.95660.97880.96270.95321.04951.0308
SGAI 1.01351.00780.99760.9870.99440.99180.99380.99921.00521.0085
LVGI 1.4031.37771.58641.1151.15521.25571.03571.00311.10181.0929
TATA -0.0251-0.007-0.0009-0.0425-0.0519-0.0405-0.0149-0.0168-0.0091-0.0153
M-score -2.64-2.51-2.56-2.72-2.50-2.32-2.08-2.09-2.34-2.50
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