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Constellation Brands Inc (NYSE:STZ)
Beneish M-Score
-2.38 (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 -2.38 suggests that the company is not a manipulator.

STZ' s 10-Year Beneish M-Score Range
Min: -3.36   Max: -1.45
Current: -2.38

-3.36
-1.45

During the past 13 years, the highest Beneish M-Score of Constellation Brands Inc was -1.45. The lowest was -3.36. And the median was -2.43.


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 * 0.6141+0.528 * 0.9167+0.404 * 0.9572+0.892 * 1.6309+0.115 * 0.8601
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8865+4.679 * -0.0169-0.327 * 0.9057
=-2.38

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

This Year (Aug14) TTM:Last Year (Aug13) TTM:
Accounts Receivable was $657 Mil.
Revenue was 1604.1 + 1526 + 1291.2 + 1443.3 = $5,865 Mil.
Gross Profit was 672 + 670.1 + 548.9 + 609.7 = $2,501 Mil.
Total Current Assets was $2,838 Mil.
Total Assets was $14,657 Mil.
Property, Plant and Equipment(Net PPE) was $2,300 Mil.
Depreciation, Depletion and Amortization(DDA) was $187 Mil.
Selling, General & Admin. Expense(SGA) was $1,037 Mil.
Total Current Liabilities was $1,876 Mil.
Long-Term Debt was $6,323 Mil.
Net Income was 195.8 + 206.7 + 157.2 + 211 = $771 Mil.
Non Operating Income was -5 + 0.5 + -0.5 + 18 = $13 Mil.
Cash Flow from Operations was 435.8 + 232.3 + 197.1 + 140.1 = $1,005 Mil.
Accounts Receivable was $656 Mil.
Revenue was 1459.8 + 673.4 + 695.9 + 766.9 = $3,596 Mil.
Gross Profit was 577 + 256.1 + 261.8 + 310.8 = $1,406 Mil.
Total Current Assets was $2,670 Mil.
Total Assets was $14,123 Mil.
Property, Plant and Equipment(Net PPE) was $1,870 Mil.
Depreciation, Depletion and Amortization(DDA) was $129 Mil.
Selling, General & Admin. Expense(SGA) was $717 Mil.
Total Current Liabilities was $1,811 Mil.
Long-Term Debt was $6,913 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)
=(656.9 / 5864.6) / (655.9 / 3596)
=0.11201105 / 0.18239711
=0.6141

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)
=(670.1 / 3596) / (672 / 5864.6)
=0.39090656 / 0.42640589
=0.9167

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 - (2838.1 + 2299.9) / 14657.4) / (1 - (2670.1 + 1870.4) / 14122.8)
=0.64946034 / 0.6784986
=0.9572

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
=5864.6 / 3596
=1.6309

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))
=(129.4 / (129.4 + 1870.4)) / (187.1 / (187.1 + 2299.9))
=0.06470647 / 0.0752312
=0.8601

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)
=(1036.6 / 5864.6) / (717 / 3596)
=0.17675545 / 0.19938821
=0.8865

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)
=((6323.2 + 1876.3) / 14657.4) / ((6912.7 + 1810.6) / 14122.8)
=0.55941026 / 0.61767497
=0.9057

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
=(770.7 - 13 - 1005.3) / 14657.4
=-0.0169

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 -2.38 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 1.16120.80671.00731.14810.74031.06560.66611.44171.1490.7622
GMI 0.98440.96970.98490.86011.00920.98921.17120.81480.89940.9687
AQI 1.03530.9941.1170.96991.02650.98871.10840.99630.95961.2939
SGI 1.15071.12621.13320.72330.96860.92071.21750.72720.93861.7409
DEPI 1.39450.73951.11920.9780.81841.0180.91521.22440.94061.1992
SGAI 1.05610.97861.10791.45181.06190.89240.77151.1191.19460.8794
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 -2.22-2.64-2.39-3.07-3.36-2.74-2.60-2.77-2.75-1.60

Constellation Brands Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
DSRI 1.38011.34681.26431.1491.01521.06020.81570.76220.71120.6141
GMI 0.79660.77250.73480.89940.93070.96120.9740.96870.93430.9167
AQI 0.99121.04541.05350.95961.07231.17851.20961.29391.10130.9572
SGI 0.72220.72090.74910.93860.97641.27011.52091.74092.0181.6309
DEPI 1.09651.0150.93760.94060.97561.321.27291.19921.15290.8601
SGAI 1.19631.2971.45251.19461.21821.03890.93040.88020.78010.8865
LVGI 1.11341.13911.09021.01691.07481.08331.06491.13390.97550.9057
TATA -0.06-0.0574-0.0424-0.0509-0.03430.06560.06580.0720.0687-0.0169
M-score -2.83-2.88-2.89-2.75-2.72-1.82-1.78-1.60-1.45-2.38
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