Archer-Daniels Midland Co (FRA:ADM) Beneish M-Score : -2.73 (As of Apr. 28, 2024)

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What is Archer-Daniels Midland Co Beneish M-Score?

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.73 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Archer-Daniels Midland Co's Beneish M-Score or its related term are showing as below:

FRA:ADM' s Beneish M-Score Range Over the Past 10 Years
Min: -2.75 Med: -2.29 Max: -1.48
Current: -2.73

During the past 13 years, the highest Beneish M-Score of Archer-Daniels Midland Co was -1.48. The lowest was -2.75. And the median was -2.29.

Archer-Daniels Midland Co Beneish M-Score Historical Data

The historical data trend for Archer-Daniels Midland Co's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Archer-Daniels Midland Co Beneish M-Score Chart

Archer-Daniels Midland Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-1.48

-2.28

-2.65

-2.29

-2.73

Archer-Daniels Midland Co Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Beneish M-Score	Get a 7-Day Free Trial															-2.29	-2.46	-2.76	-2.41	-2.73

Competitive Comparison of Archer-Daniels Midland Co's Beneish M-Score

For the Farm Products subindustry, Archer-Daniels Midland Co's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Archer-Daniels Midland Co's Beneish M-Score Distribution in the Consumer Packaged Goods Industry

For the Consumer Packaged Goods industry and Consumer Defensive sector, Archer-Daniels Midland Co's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Archer-Daniels Midland Co's Beneish M-Score falls into.

Archer-Daniels Midland Co Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Archer-Daniels Midland Co for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.9252

0.528 * 0.9307

0.404 * 1.0779

0.892 * 0.9011

0.115 * 1.0268

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.1132

4.679 * -0.024348

0.327 * 0.9307

-2.75

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was €5,957 Mil.
Revenue was 21070.826 + 20328.215 + 23250.37 + 22483.248 = €87,133 Mil.
Gross Profit was 1595.58 + 1695.97 + 1738.009 + 1942.72 = €6,972 Mil.
Total Current Assets was €27,296 Mil.
Total Assets was €50,097 Mil.
Property, Plant and Equipment(Net PPE) was €10,746 Mil.
Depreciation, Depletion and Amortization(DDA) was €982 Mil.
Selling, General, & Admin. Expense(SGA) was €3,205 Mil.
Total Current Liabilities was €17,113 Mil.
Long-Term Debt & Capital Lease Obligation was €8,427 Mil.
Net Income was 518.105 + 769.277 + 855.621 + 1092.78 = €3,236 Mil.
Non Operating Income was 6.419 + 36.543 + 118.144 + 197.074 = €358 Mil.
Cash Flow from Operations was 2355.773 + 929.504 + 2315.807 + -1503.74 = €4,097 Mil.

Total Receivables was €7,145 Mil.
Revenue was 24486.416 + 24929.83 + 25810.664 + 21474.2 = €96,701 Mil.
Gross Profit was 1663.328 + 1829.11 + 1986.6 + 1722.476 = €7,202 Mil.
Total Current Assets was €33,427 Mil.
Total Assets was €56,427 Mil.
Property, Plant and Equipment(Net PPE) was €10,404 Mil.
Depreciation, Depletion and Amortization(DDA) was €979 Mil.
Selling, General, & Admin. Expense(SGA) was €3,196 Mil.
Total Current Liabilities was €22,836 Mil.
Long-Term Debt & Capital Lease Obligation was €8,072 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(5956.832 / 87132.659)	/	(7145.136 / 96701.11)
	=	0.068365	/	0.073889
	=	0.9252

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)
	=	(7201.514 / 96701.11)	/	(6972.279 / 87132.659)
	=	0.074472	/	0.080019
	=	0.9307

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (27296.339 + 10746.323) / 50096.627)	/	(1 - (33427.04 + 10403.824) / 56426.656)
	=	0.240614	/	0.223224
	=	1.0779

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	87132.659	/	96701.11
	=	0.9011

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(978.854 / (978.854 + 10403.824))	/	(982.298 / (982.298 + 10746.323))
	=	0.085995	/	0.083752
	=	1.0268

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(3205.475 / 87132.659)	/	(3195.724 / 96701.11)
	=	0.036788	/	0.033047
	=	1.1132

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((8427.23 + 17113.054) / 50096.627)	/	((8072.144 + 22836.304) / 56426.656)
	=	0.50982	/	0.547763
	=	0.9307

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
	=	(3235.783 - 358.18	-	4097.344)	/	50096.627
	=	-0.024348

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Archer-Daniels Midland Co has a M-score of -2.75 suggests that the company is unlikely to be a manipulator.

Archer-Daniels Midland Co Beneish M-Score Related Terms

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Archer-Daniels Midland Co (FRA:ADM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Archer-Daniels Midland Co (FRA:ADM) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

ADM:USA ADM:Mexico 1ADM:Italy ADM:Germany A1DM34:Brazil ARDA:Austria

Address

77 West Wacker Drive, Suite 4600, Chicago, IL, USA, 60601

Website

https://www.adm.com

Archer-Daniels Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. The company is also one of the largest grain merchandisers through its extensive network of logistical assets to store and transport crops around the globe. ADM also runs a nutrition business that focuses on both human and animal ingredients and is a large producer of corn-based sweeteners, starches, and ethanol.