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Constellation Brands Inc (NYSE:STZ)
Beneish M-Score
-2.43 (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.

Constellation Brands Inc has a M-score of -2.43 suggests that the company is not a manipulator.

STZ' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -1.45
Current: -2.43

-3.35
-1.45

During the past 13 years, the highest Beneish M-Score of Constellation Brands Inc was -1.45. The lowest was -3.35. And the median was -2.44.


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 Constellation Brands 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 * 0.7513+0.528 * 0.9404+0.404 * 0.9505+0.892 * 1.3957+0.115 * 0.93
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9323+4.679 * -0.0121-0.327 * 0.9214
=-2.43

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

This Year (Nov14) TTM:Last Year (Nov13) TTM:
Accounts Receivable was $701 Mil.
Revenue was 1541.7 + 1604.1 + 1526 + 1291.2 = $5,963 Mil.
Gross Profit was 638.9 + 672 + 670.1 + 548.9 = $2,530 Mil.
Total Current Assets was $3,031 Mil.
Total Assets was $14,981 Mil.
Property, Plant and Equipment(Net PPE) was $2,419 Mil.
Depreciation, Depletion and Amortization(DDA) was $197 Mil.
Selling, General & Admin. Expense(SGA) was $1,054 Mil.
Total Current Liabilities was $1,249 Mil.
Long-Term Debt was $7,082 Mil.
Net Income was 222.2 + 195.8 + 206.7 + 157.2 = $782 Mil.
Non Operating Income was 21.2 + -5 + 0.5 + -0.5 = $16 Mil.
Cash Flow from Operations was 82 + 435.8 + 232.3 + 197.1 = $947 Mil.
Accounts Receivable was $669 Mil.
Revenue was 1443.3 + 1459.8 + 673.4 + 695.9 = $4,272 Mil.
Gross Profit was 609.7 + 577 + 256.1 + 261.8 = $1,705 Mil.
Total Current Assets was $2,835 Mil.
Total Assets was $14,336 Mil.
Property, Plant and Equipment(Net PPE) was $1,905 Mil.
Depreciation, Depletion and Amortization(DDA) was $143 Mil.
Selling, General & Admin. Expense(SGA) was $810 Mil.
Total Current Liabilities was $1,755 Mil.
Long-Term Debt was $6,897 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)
=(701.3 / 5963) / (668.8 / 4272.4)
=0.11760859 / 0.15653965
=0.7513

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)
=(672 / 4272.4) / (638.9 / 5963)
=0.3989795 / 0.42426631
=0.9404

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 - (3030.8 + 2419.1) / 14980.5) / (1 - (2835.4 + 1905.4) / 14336.3)
=0.63620039 / 0.66931496
=0.9505

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
=5963 / 4272.4
=1.3957

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))
=(143.2 / (143.2 + 1905.4)) / (196.6 / (196.6 + 2419.1))
=0.0699014 / 0.07516152
=0.93

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)
=(1054 / 5963) / (810 / 4272.4)
=0.17675667 / 0.18958899
=0.9323

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)
=((7081.5 + 1248.5) / 14980.5) / ((6897 + 1755) / 14336.3)
=0.55605621 / 0.603503
=0.9214

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
=(781.9 - 16.2 - 947.2) / 14980.5
=-0.0121

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.

Constellation Brands Inc has a M-score of -2.43 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.

Constellation Brands Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
DSRI 1.16120.80671.00721.14810.74030.85110.8341.61811.02370.7622
GMI 0.98440.96980.98490.86011.00921.23860.93540.7261.00950.9687
AQI 1.03530.9941.1170.96991.02650.98871.10840.99630.95961.2939
SGI 1.15061.12621.13310.72330.96861.15280.97240.64791.05341.7409
DEPI 1.39480.73971.11860.9780.81841.0180.91521.29490.88941.1992
SGAI 1.05610.97851.10791.45181.05350.71870.96571.25591.06560.8783
LVGI 1.10130.92611.09091.12661.04080.87140.92280.96071.01691.1339
TATA -0.0059-0.0151-0.0091-0.0576-0.1238-0.0638-0.0424-0.0798-0.05090.072
M-score -2.22-2.64-2.39-3.07-3.35-2.57-2.82-2.74-2.69-1.60

Constellation Brands Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
DSRI 1.2361.00621.02370.9280.99680.79220.76220.71120.61410.7513
GMI 0.84170.92341.00951.01821.02231.00290.96870.93430.91670.9404
AQI 1.04541.05350.95961.07231.17851.20961.29391.10130.95720.9505
SGI 0.78550.94131.05341.06821.35081.5661.74092.0181.63091.3957
DEPI 1.08151.01240.88940.90271.22821.15581.19921.16570.86760.93
SGAI 1.19071.15691.06471.11230.97520.90150.87910.7810.88760.9323
LVGI 1.13911.09021.01691.07481.08331.06491.13390.97550.90570.9214
TATA -0.0574-0.0424-0.0509-0.03430.06560.06580.0720.0687-0.0169-0.0121
M-score -2.86-2.80-2.69-2.66-1.78-1.76-1.60-1.45-2.38-2.43
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