Switch to:
Constellation Brands Inc (NYSE:STZ)
Beneish M-Score
-2.57 (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 -2.57 suggests that the company is not a manipulator.

STZ' s 10-Year Beneish M-Score Range
Min: -3.35   Max: -1.6
Current: -2.57

-3.35
-1.6

During the past 13 years, the highest Beneish M-Score of Constellation Brands Inc was -1.60. The lowest was -3.35. And the median was -2.45.


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 * 0.7723+0.528 * 0.9565+0.404 * 0.9455+0.892 * 1.2384+0.115 * 1.0218
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9729+4.679 * -0.0171-0.327 * 0.9297
=-2.57

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

This Year (Feb15) TTM:Last Year (Feb14) TTM:
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 $15,145 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 $7,138 Mil.
Net Income was 214.6 + 222.2 + 195.8 + 206.7 = $839 Mil.
Non Operating Income was 0.4 + 21.2 + -5 + 0.5 = $17 Mil.
Cash Flow from Operations was 330.9 + 82 + 435.8 + 232.3 = $1,081 Mil.
Accounts Receivable was $626 Mil.
Revenue was 1291.2 + 1443.3 + 1459.8 + 673.4 = $4,868 Mil.
Gross Profit was 548.9 + 609.7 + 577 + 256.1 = $1,992 Mil.
Total Current Assets was $2,747 Mil.
Total Assets was $14,302 Mil.
Property, Plant and Equipment(Net PPE) was $2,014 Mil.
Depreciation, Depletion and Amortization(DDA) was $155 Mil.
Selling, General & Admin. Expense(SGA) was $895 Mil.
Total Current Liabilities was $2,026 Mil.
Long-Term Debt was $6,373 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)
=(598.9 / 6028) / (626.2 / 4867.7)
=0.09935302 / 0.12864392
=0.7723

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)
=(638.9 / 4867.7) / (597.6 / 6028)
=0.40916655 / 0.4277704
=0.9565

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 - (2910.8 + 2681.6) / 15144.5) / (1 - (2747.2 + 2014.3) / 14302.1)
=0.63073063 / 0.66707686
=0.9455

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
=6028 / 4867.7
=1.2384

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))
=(155.3 / (155.3 + 2014.3)) / (202 / (202 + 2681.6))
=0.07158001 / 0.07005132
=1.0218

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)
=(1078.4 / 6028) / (895.1 / 4867.7)
=0.17889847 / 0.18388561
=0.9729

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)
=((7137.5 + 1130.7) / 15144.5) / ((6373.3 + 2025.7) / 14302.1)
=0.54595398 / 0.58725642
=0.9297

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
=(839.3 - 17.1 - 1081) / 15144.5
=-0.0171

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 -2.57 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 0.73971.11860.9780.81841.0180.91521.22440.94061.19921.0218
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 -2.64-2.39-3.07-3.35-2.74-2.81-2.77-2.68-1.60-2.57

Constellation Brands Inc Quarterly Data

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
DSRI 0.74071.02370.9280.99680.79220.76220.71120.61410.75130.7723
GMI 1.25431.00951.01821.02231.00290.96870.93430.91670.94040.9565
AQI 1.05350.95961.07231.17851.20961.29391.10130.95720.95050.9455
SGI 1.27871.05341.06821.35081.5661.74092.0181.63091.39571.2384
DEPI 0.95080.93180.96641.30871.23071.21061.16390.86760.931.0218
SGAI 0.85141.06431.1120.97560.90180.87940.78130.88760.93230.9729
LVGI 1.09021.01691.07481.08331.06491.13390.97550.90570.92140.9297
TATA -0.0424-0.0509-0.03430.06560.06580.0720.0687-0.0169-0.0121-0.0171
M-score -2.52-2.68-2.65-1.77-1.75-1.60-1.45-2.38-2.43-2.57
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK