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GuruFocus has detected 7 Warning Signs with Sysco Corp $SYY.
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Sysco Corp (NYSE:SYY)
Beneish M-Score
-2.42 (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.

Sysco Corp has a M-score of -2.42 suggests that the company is not a manipulator.

SYY' s Beneish M-Score Range Over the Past 10 Years
Min: -10.23   Max: -2.09
Current: -2.42

-10.23
-2.09

During the past 13 years, the highest Beneish M-Score of Sysco Corp was -2.09. The lowest was -10.23. And the median was -2.61.


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 Sysco Corp 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 * 1.0881+0.528 * 0.9506+0.404 * 1.6538+0.892 * 1.0862+0.115 * 0.7739
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9998+4.679 * -0.0518-0.327 * 1.2194
=-2.42

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $3,963 Mil.
Revenue was 13457.268 + 13968.654 + 13647.891 + 12002.791 = $53,077 Mil.
Gross Profit was 2571.863 + 2691.919 + 2502.838 + 2142.825 = $9,909 Mil.
Total Current Assets was $8,011 Mil.
Total Assets was $17,630 Mil.
Property, Plant and Equipment(Net PPE) was $4,331 Mil.
Depreciation, Depletion and Amortization(DDA) was $830 Mil.
Selling, General & Admin. Expense(SGA) was $7,926 Mil.
Total Current Liabilities was $5,052 Mil.
Long-Term Debt was $8,314 Mil.
Net Income was 275.167 + 323.887 + 215.667 + 217.136 = $1,032 Mil.
Non Operating Income was 2.32 + 7.216 + -141.303 + 6.952 = $-125 Mil.
Cash Flow from Operations was 356.25 + 248.674 + 944.161 + 520.1 = $2,069 Mil.
Accounts Receivable was $3,353 Mil.
Revenue was 12153.626 + 12562.611 + 12401.938 + 11746.659 = $48,865 Mil.
Gross Profit was 2156.814 + 2237.995 + 2220.164 + 2057.498 = $8,672 Mil.
Total Current Assets was $6,779 Mil.
Total Assets was $13,089 Mil.
Property, Plant and Equipment(Net PPE) was $3,937 Mil.
Depreciation, Depletion and Amortization(DDA) was $560 Mil.
Selling, General & Admin. Expense(SGA) was $7,298 Mil.
Total Current Liabilities was $3,872 Mil.
Long-Term Debt was $4,266 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)
=(3963.458 / 53076.604) / (3353.453 / 48864.834)
=0.0746743 / 0.06862712
=1.0881

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)
=(8672.471 / 48864.834) / (9909.445 / 53076.604)
=0.17747878 / 0.18670081
=0.9506

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 - (8011.206 + 4331.129) / 17630.066) / (1 - (6779.026 + 3936.612) / 13089.468)
=0.2999269 / 0.1813542
=1.6538

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
=53076.604 / 48864.834
=1.0862

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))
=(559.766 / (559.766 + 3936.612)) / (830.269 / (830.269 + 4331.129))
=0.12449265 / 0.16086126
=0.7739

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)
=(7925.752 / 53076.604) / (7298.111 / 48864.834)
=0.14932666 / 0.14935303
=0.9998

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)
=((8313.651 + 5052.286) / 17630.066) / ((4265.857 + 3872.214) / 13089.468)
=0.75813312 / 0.62172664
=1.2194

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
=(1031.857 - -124.815 - 2069.185) / 17630.066
=-0.0518

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.

Sysco Corp has a M-score of -2.42 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 local exchange's currency.

Sysco Corp Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
DSRI 0.97880.97410.92291.04880.94971.02391.01940.94280.9745
GMI 0.99991.00571.00431.02641.02451.01941.02381.00120.9787
AQI 0.94230.89760.96850.95340.95051.09410.96290.74211.1934
SGI 1.0741.07080.98221.05581.07781.04791.04741.04651.0346
DEPI 1.04451.02961.0041.05521.06070.85310.94050.99090.836
SGAI 0.98020.983100.99271.00011.02710.99331.06110.9491
LVGI 1.00690.99911.0070.96750.99140.97521.02941.26781.085
TATA -0.0441-0.0509-0.05280.0041-0.0238-0.0423-0.0436-0.0502-0.0522
M-score -2.66-2.71-2.65-2.35-2.57-2.58-2.64-2.93-2.69

Sysco Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.01551.01460.93980.94280.93750.93510.99240.97451.11881.0881
GMI 1.01031.00991.0111.00120.99720.98690.98020.97870.96110.9506
AQI 0.96120.720.70720.74210.96231.29811.36491.19341.70361.6538
SGI 1.0491.05751.05971.04651.03281.0161.01141.03461.0611.0862
DEPI 0.95760.97620.98480.99090.98740.97230.9110.8360.85820.7739
SGAI 1.01191.01461.01351.06111.05651.04311.04260.94910.97170.9998
LVGI 1.02921.24791.24541.26780.990.96860.97381.0851.40491.2194
TATA -0.0347-0.0344-0.0364-0.0502-0.0468-0.0658-0.0698-0.0522-0.0718-0.0518
M-score -2.61-2.77-2.85-2.93-2.75-2.72-2.68-2.69-2.53-2.42
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