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Constellation Brands Inc (NYSE:STZ)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

STZ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.35   Max: -1.45
Current: -2.6

-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 -2.47.


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 * 0.9553+0.528 * 0.9491+0.404 * 0.9482+0.892 * 1.0668+0.115 * 1.1301
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0104+4.679 * -0.0263-0.327 * 0.939
=-2.60

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

This Year (Nov15) TTM:Last Year (Nov14) TTM:
Accounts Receivable was $715 Mil.
Revenue was 1640.5 + 1733.4 + 1631.3 + 1356.2 = $6,361 Mil.
Gross Profit was 733.5 + 775.6 + 737.1 + 597.6 = $2,844 Mil.
Total Current Assets was $3,461 Mil.
Total Assets was $16,157 Mil.
Property, Plant and Equipment(Net PPE) was $2,949 Mil.
Depreciation, Depletion and Amortization(DDA) was $210 Mil.
Selling, General & Admin. Expense(SGA) was $1,136 Mil.
Total Current Liabilities was $1,921 Mil.
Long-Term Debt was $6,515 Mil.
Net Income was 270.5 + 302.4 + 238.6 + 214.6 = $1,026 Mil.
Non Operating Income was 27.3 + -0.9 + 1 + 0.4 = $28 Mil.
Cash Flow from Operations was 288.5 + 597.4 + 205.7 + 330.9 = $1,423 Mil.
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.



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)
=(714.7 / 6361.4) / (701.3 / 5963)
=0.11234948 / 0.11760859
=0.9553

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)
=(775.6 / 5963) / (733.5 / 6361.4)
=0.42426631 / 0.44703996
=0.9491

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 - (3460.9 + 2949) / 16156.6) / (1 - (3030.8 + 2419.1) / 14980.5)
=0.6032643 / 0.63620039
=0.9482

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
=6361.4 / 5963
=1.0668

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))
=(196.6 / (196.6 + 2419.1)) / (210.1 / (210.1 + 2949))
=0.07516152 / 0.06650628
=1.1301

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)
=(1136.1 / 6361.4) / (1054 / 5963)
=0.17859276 / 0.17675667
=1.0104

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)
=((6515 + 1920.8) / 16156.6) / ((7081.5 + 1248.5) / 14980.5)
=0.52212718 / 0.55605621
=0.939

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
=(1026.1 - 27.8 - 1422.5) / 16156.6
=-0.0263

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 -2.60 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

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15
DSRI 0.80671.00721.14810.74031.06560.81891.31611.02370.76220.7723
GMI 0.96980.98490.86011.00920.98920.95260.89261.00950.96870.9565
AQI 0.9941.1170.96991.02650.98871.10840.99630.95961.29390.9455
SGI 1.12621.13310.72330.96860.92070.99030.79661.05341.74091.2384
DEPI 0.73971.11860.9780.81841.0180.91521.29490.88941.19921.0218
SGAI 0.97851.10791.45181.05350.89980.94831.02151.06560.87830.9729
LVGI 0.92611.09091.12661.04080.87140.92280.96071.01691.13390.9297
TATA -0.0151-0.0091-0.0576-0.1238-0.0638-0.0424-0.0798-0.05090.072-0.0171
M-score -2.64-2.39-3.07-3.35-2.74-2.81-2.76-2.69-1.60-2.57

Constellation Brands Inc Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
DSRI 0.99680.79220.76220.71120.61410.75130.77230.9971.03140.9553
GMI 1.02231.00290.96870.93430.91670.94040.95650.9750.97130.9491
AQI 1.17851.20961.29391.10130.95720.95050.94550.97120.95970.9482
SGI 1.35081.5661.74092.0181.63091.39571.23841.07221.06791.0668
DEPI 1.22821.15581.19921.16570.86760.931.02181.07261.06691.1301
SGAI 0.97520.90150.87910.7810.88760.93230.97291.04871.00561.0104
LVGI 1.08331.06491.13390.97550.90570.92140.92970.92340.96380.939
TATA 0.06560.06580.0720.0687-0.0169-0.0121-0.0171-0.0132-0.0166-0.0263
M-score -1.78-1.76-1.60-1.45-2.38-2.43-2.57-2.48-2.48-2.60
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