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Flowers Foods Inc (NYSE:FLO)
Beneish M-Score
-2.31 (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 -2.31 suggests that the company is not a manipulator.

FLO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.51   Max: -2.08
Current: -2.31

-3.51
-2.08

During the past 13 years, the highest Beneish M-Score of Flowers Foods Inc was -2.08. The lowest was -3.51. And the median was -2.70.


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 * 1.5596+0.528 * 1.0076+0.404 * 1.1534+0.892 * 0.7048+0.115 * 1.3425
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.984+4.679 * -0.0277-0.327 * 1.1714
=-2.31

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

This Year (Apr16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $284 Mil.
Revenue was 0 + 858.363 + 885.302 + 888.795 = $2,632 Mil.
Gross Profit was 0 + 402.424 + 421.257 + 431.542 = $1,255 Mil.
Total Current Assets was $495 Mil.
Total Assets was $2,816 Mil.
Property, Plant and Equipment(Net PPE) was $788 Mil.
Depreciation, Depletion and Amortization(DDA) was $92 Mil.
Selling, General & Admin. Expense(SGA) was $958 Mil.
Total Current Liabilities was $441 Mil.
Long-Term Debt was $954 Mil.
Net Income was 0 + 32.246 + 43.796 + 51.76 = $128 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 0 + 43.691 + 64.608 + 97.511 = $206 Mil.
Accounts Receivable was $258 Mil.
Revenue was 1146.045 + 862.475 + 849.36 + 877.378 = $3,735 Mil.
Gross Profit was 560.129 + 408.716 + 406.382 + 419.359 = $1,795 Mil.
Total Current Assets was $490 Mil.
Total Assets was $2,423 Mil.
Property, Plant and Equipment(Net PPE) was $790 Mil.
Depreciation, Depletion and Amortization(DDA) was $129 Mil.
Selling, General & Admin. Expense(SGA) was $1,381 Mil.
Total Current Liabilities was $353 Mil.
Long-Term Debt was $671 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)
=(283.848 / 2632.46) / (258.249 / 3735.258)
=0.10782614 / 0.0691382
=1.5596

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)
=(1794.586 / 3735.258) / (1255.223 / 2632.46)
=0.48044499 / 0.4768251
=1.0076

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 - (495.129 + 787.767) / 2815.672) / (1 - (489.694 + 789.661) / 2422.852)
=0.54437307 / 0.47196321
=1.1534

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
=2632.46 / 3735.258
=0.7048

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))
=(129.486 / (129.486 + 789.661)) / (92.358 / (92.358 + 787.767))
=0.14087627 / 0.10493737
=1.3425

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)
=(957.753 / 2632.46) / (1381.06 / 3735.258)
=0.36382433 / 0.36973617
=0.984

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)
=((953.821 + 440.538) / 2815.672) / ((671.339 + 352.908) / 2422.852)
=0.49521358 / 0.42274435
=1.1714

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
=(127.802 - 0 - 205.81) / 2815.672
=-0.0277

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 -2.31 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.99220.96811.09080.93180.94031.03591.25680.8050.92941.1342
GMI 1.00141.0151.02781.02390.97641.01690.99970.98890.98860.9984
AQI 1.16221.06371.30290.99191.01251.02661.28021.13751.03161.1289
SGI 1.10071.07841.18571.0770.98961.07751.09851.23130.99951.0079
DEPI 0.95511.01611.07760.93740.95951.01720.97881.03080.87310.9764
SGAI 0.99170.9620.95790.96131.0211.00780.99181.00851.00680.9906
LVGI 0.9980.82011.63450.84750.77811.37771.25571.09290.88971.0693
TATA -0.0775-0.12150.018-0.0782-0.1275-0.007-0.0405-0.0158-0.0574-0.0468
M-score -2.70-2.91-2.20-2.78-3.08-2.51-2.32-2.51-2.79-2.54

Flowers Foods Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Apr16
DSRI 0.8050.87170.9140.92350.92940.97240.99921.05051.13421.5596
GMI 0.98890.99741.00070.99480.98860.98960.98740.99410.99841.0076
AQI 1.13751.08051.07961.03651.03161.00861.00111.13811.12891.1534
SGI 1.23131.15271.07541.020.99950.98820.99671.01411.00790.7048
DEPI 1.03081.00980.9940.85410.87310.91020.93640.94430.97641.3425
SGAI 1.00851.01451.01450.99811.00681.00541.00081.01010.99060.984
LVGI 1.09291.06231.1060.92150.88970.92170.90790.98751.06931.1714
TATA -0.0153-0.0507-0.0371-0.034-0.0574-0.0555-0.0705-0.0688-0.0468-0.0277
M-score -2.50-2.69-2.67-2.67-2.79-2.76-2.80-2.69-2.54-2.31
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