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GuruFocus has detected 6 Warning Signs with J&J Snack Foods Corp $JJSF.
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J&J Snack Foods Corp (NAS:JJSF)
Beneish M-Score
-2.84 (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.

J&J Snack Foods Corp has a M-score of -2.84 suggests that the company is not a manipulator.

JJSF' s Beneish M-Score Range Over the Past 10 Years
Min: -3.23   Max: -2.35
Current: -2.84

-3.23
-2.35

During the past 13 years, the highest Beneish M-Score of J&J Snack Foods Corp was -2.35. The lowest was -3.23. 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 J&J Snack Foods Corp 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 * 0.9928+0.528 * 0.9997+0.404 * 0.8815+0.892 * 1.0093+0.115 * 1.0028
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1+4.679 * -0.0685-0.327 * 0.9908
=-2.84

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $92.4 Mil.
Revenue was 225.57 + 262.24 + 277.981 + 229.71 = $995.5 Mil.
Gross Profit was 65.895 + 79.797 + 92.086 + 68.749 = $306.5 Mil.
Total Current Assets was $362.9 Mil.
Total Assets was $794.2 Mil.
Property, Plant and Equipment(Net PPE) was $186.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $40.4 Mil.
Selling, General & Admin. Expense(SGA) was $192.8 Mil.
Total Current Liabilities was $100.0 Mil.
Long-Term Debt was $1.2 Mil.
Net Income was 13.54 + 20.618 + 26.791 + 15.588 = $76.5 Mil.
Non Operating Income was 1.227 + 1.014 + 0.981 + 0.977 = $4.2 Mil.
Cash Flow from Operations was 26.4 + 49.877 + 43.047 + 7.383 = $126.7 Mil.
Accounts Receivable was $92.2 Mil.
Revenue was 222.85 + 259.772 + 278.724 + 225.008 = $986.4 Mil.
Gross Profit was 63.835 + 82.443 + 90.396 + 66.95 = $303.6 Mil.
Total Current Assets was $305.3 Mil.
Total Assets was $741.6 Mil.
Property, Plant and Equipment(Net PPE) was $176.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $38.5 Mil.
Selling, General & Admin. Expense(SGA) was $191.0 Mil.
Total Current Liabilities was $94.2 Mil.
Long-Term Debt was $1.1 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)
=(92.368 / 995.501) / (92.18 / 986.354)
=0.09278544 / 0.09345529
=0.9928

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)
=(303.624 / 986.354) / (306.527 / 995.501)
=0.30782457 / 0.3079123
=0.9997

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 - (362.851 + 186.132) / 794.173) / (1 - (305.253 + 176.646) / 741.638)
=0.30873626 / 0.35022342
=0.8815

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
=995.501 / 986.354
=1.0093

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))
=(38.481 / (38.481 + 176.646)) / (40.409 / (40.409 + 186.132))
=0.17887573 / 0.17837389
=1.0028

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)
=(192.75 / 995.501) / (190.986 / 986.354)
=0.1936211 / 0.19362825
=1

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)
=((1.151 + 99.995) / 794.173) / ((1.126 + 94.211) / 741.638)
=0.12736016 / 0.12854924
=0.9908

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
=(76.537 - 4.199 - 126.707) / 794.173
=-0.0685

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.

J&J Snack Foods Corp has a M-score of -2.84 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 local exchange's currency.

J&J Snack Foods Corp Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
DSRI 0.95740.97410.9411.09651.0050.91251.0971.07770.9670.9419
GMI 1.02141.1040.92860.97821.05871.02550.99240.97021.01481.005
AQI 1.31221.05690.88421.05950.95280.84261.42311.06450.84910.9709
SGI 1.1051.10631.03761.06681.0681.11661.04441.05971.06181.0169
DEPI 0.99540.98571.02591.04141.09281.08830.96610.97411.04741.0174
SGAI 0.99940.93390.95010.99490.95230.96590.96141.02810.99010.9919
LVGI 0.9870.95260.94790.95870.93590.97890.95141.05850.97240.9853
TATA -0.0748-0.0726-0.0926-0.0428-0.0599-0.0609-0.0397-0.0564-0.0472-0.0625
M-score -2.63-2.65-2.99-2.50-2.64-2.77-2.35-2.64-2.71-2.81

J&J Snack Foods Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.07771.06361.0280.99030.9671.0361.0280.97130.94190.9928
GMI 0.97020.98360.99081.00331.01481.01011.0080.99941.0050.9997
AQI 1.06451.03840.95520.82310.84910.91980.94041.03130.97090.8815
SGI 1.05971.05561.07311.07311.06181.06211.0451.0211.01691.0093
DEPI 0.97410.9720.98161.01291.04741.06361.05421.02771.01741.0028
SGAI 1.02351.03381.03021.01160.99450.98110.97560.98380.99191
LVGI 1.05850.98450.99410.96280.97240.96291.01070.95320.98530.9908
TATA -0.0564-0.0481-0.042-0.0481-0.0472-0.0404-0.0423-0.0457-0.0625-0.0685
M-score -2.63-2.59-2.61-2.71-2.71-2.58-2.62-2.67-2.81-2.84
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