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Constellation Brands Inc (NYSE:STZ)
Beneish M-Score
-2.41 (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 -2.41 suggests that the company is not a manipulator.

STZ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.45   Max: -1.6
Current: -2.41

-3.45
-1.6

During the past 13 years, the highest Beneish M-Score of Constellation Brands Inc was -1.60. The lowest was -3.45. 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 * 1.1259+0.528 * 0.952+0.404 * 0.9977+0.892 * 1.0863+0.115 * 1.1267
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0049+4.679 * -0.0241-0.327 * 0.984
=-2.41

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

This Year (Feb16) TTM:Last Year (Feb15) TTM:
Accounts Receivable was $733 Mil.
Revenue was 1543.2 + 1640.5 + 1733.4 + 1631.3 = $6,548 Mil.
Gross Profit was 696.1 + 733.5 + 775.6 + 737.1 = $2,942 Mil.
Total Current Assets was $2,978 Mil.
Total Assets was $16,965 Mil.
Property, Plant and Equipment(Net PPE) was $3,333 Mil.
Depreciation, Depletion and Amortization(DDA) was $221 Mil.
Selling, General & Admin. Expense(SGA) was $1,177 Mil.
Total Current Liabilities was $2,272 Mil.
Long-Term Debt was $6,816 Mil.
Net Income was 243.4 + 270.5 + 302.4 + 238.6 = $1,055 Mil.
Non Operating Income was 22.6 + 27.3 + -0.9 + 1 = $50 Mil.
Cash Flow from Operations was 322.1 + 288.5 + 597.4 + 205.7 = $1,414 Mil.
Accounts Receivable was $599 Mil.
Revenue was 1356.2 + 1541.7 + 1604.1 + 1526 = $6,028 Mil.
Gross Profit was 597.6 + 638.9 + 672 + 670.1 = $2,579 Mil.
Total Current Assets was $2,911 Mil.
Total Assets was $15,093 Mil.
Property, Plant and Equipment(Net PPE) was $2,682 Mil.
Depreciation, Depletion and Amortization(DDA) was $202 Mil.
Selling, General & Admin. Expense(SGA) was $1,078 Mil.
Total Current Liabilities was $1,131 Mil.
Long-Term Debt was $7,086 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)
=(732.5 / 6548.4) / (598.9 / 6028)
=0.11185939 / 0.09935302
=1.1259

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)
=(733.5 / 6028) / (696.1 / 6548.4)
=0.4277704 / 0.44931586
=0.952

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 - (2977.6 + 3333.4) / 16965) / (1 - (2910.8 + 2681.6) / 15093)
=0.62799882 / 0.62947062
=0.9977

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
=6548.4 / 6028
=1.0863

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))
=(202 / (202 + 2681.6)) / (221 / (221 + 3333.4))
=0.07005132 / 0.06217646
=1.1267

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)
=(1177.2 / 6548.4) / (1078.4 / 6028)
=0.1797691 / 0.17889847
=1.0049

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)
=((6816.2 + 2272.3) / 16965) / ((7086 + 1130.7) / 15093)
=0.5357206 / 0.54440469
=0.984

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
=(1054.9 - 50 - 1413.7) / 16965
=-0.0241

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 -2.41 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

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
DSRI 1.00721.14810.74031.06560.81891.31611.02370.76220.77231.1259
GMI 0.98490.86011.00920.98920.95260.89261.00950.96870.95650.952
AQI 1.1170.96991.02650.98871.10840.99630.95961.29390.94360.9977
SGI 1.13320.72330.96860.92070.99030.79661.05341.74091.23841.0863
DEPI 1.11920.9780.81841.0180.91521.22440.94061.19921.02181.1267
SGAI 1.10791.45181.06190.89240.94861.02151.06430.87940.97291.0049
LVGI 1.09091.12661.04080.87140.92280.96071.01691.13390.9270.984
TATA -0.0091-0.1384-0.1238-0.0638-0.0424-0.0798-0.05090.072-0.0171-0.0241
M-score -2.39-3.45-3.36-2.74-2.81-2.77-2.68-1.60-2.57-2.41

Constellation Brands Inc Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
DSRI 0.79220.76220.71120.61410.75130.77230.9971.03140.95531.1259
GMI 1.00290.96870.93430.91670.94040.95650.9750.97130.94910.952
AQI 1.20961.29391.10130.95720.95050.94360.97120.95970.94820.9977
SGI 1.5661.74092.0181.63091.39571.23841.07221.06791.06681.0863
DEPI 1.15581.19921.16570.86760.931.02181.07261.06691.13011.1267
SGAI 0.8770.87910.7810.88760.93230.97291.04871.00561.01041.0049
LVGI 1.06491.13390.97550.90570.92140.9270.92340.96380.9390.984
TATA 0.06580.0720.0687-0.0169-0.0121-0.0171-0.0132-0.0166-0.0263-0.0241
M-score -1.75-1.60-1.45-2.38-2.43-2.57-2.48-2.48-2.60-2.41
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