Hershey Beneish M Score

HSY -  USA Stock  

USD 194.37  0.24  0.12%

This module uses fundamental data of Hershey Foods to approximate the value of its Beneish M Score. Hershey Foods M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Please check Hershey Foods Piotroski F Score and Hershey Foods Altman Z Score analysis.

Hershey Beneish M Score 

 
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Hershey Foods Debt Current is fairly stable at the moment as compared to the past year. Hershey Foods reported Debt Current of 589.8 Million in 2021. Debt to Equity Ratio is likely to rise to 4.15 in 2022, whereas Total Debt is likely to drop slightly above 4.5 B in 2022. Hershey Foods Debt to Equity Ratio is fairly stable at the moment as compared to the past year. Hershey Foods reported Debt to Equity Ratio of 3.55 in 2021. Gross Margin is likely to rise to 0.54 in 2022, whereas Accrued Expenses Turnover is likely to drop 9.62 in 2022.
At this time, it appears that Hershey Foods Corp is an unlikely manipulator. The earnings manipulation may begin if Hershey Foods' top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Hershey Foods executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Hershey Foods' earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.47
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables
0.99
Asset Quality
0.89
Expense Coverage
1.04
Gross Margin Strengs
1.04
Accruals Factor
1.04
Depreciation Resistance
1.01
Net Sales Growth
0.98
Financial Leverage Condition
1.0

Hershey Foods Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Hershey Foods' auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues9.2 B9.4 B
Fairly Down
Increasing
Slightly volatile
Selling General and Administrative Expense2.2 B2.2 B
Fairly Up
Increasing
Slightly volatile
Net Cash Flow from Operations1.7 BB
Fairly Down
Increasing
Slightly volatile
Depreciation Amortization and Accretion324.9 M339.1 M
Sufficiently Down
Increasing
Slightly volatile
Total Assets9.1 B10.5 B
Fairly Down
Increasing
Slightly volatile
Investments86.9 M87.4 M
Slightly Down
Decreasing
Slightly volatile
Investments Current86.9 M87.4 M
Slightly Down
Decreasing
Slightly volatile
Property Plant and Equipment Net2.6 B2.6 B
Fairly Down
Increasing
Slightly volatile
Trade and Non Trade Receivables689.8 M707.5 M
Fairly Down
Increasing
Slightly volatile
Total LiabilitiesB7.9 B
Fairly Down
Increasing
Slightly volatile
Current Assets3.1 B3.4 B
Moderately Down
Increasing
Slightly volatile
Assets Non CurrentB7.1 B
Fairly Down
Increasing
Slightly volatile
Current Liabilities2.2 B2.2 B
Fairly Up
Increasing
Slightly volatile
Liabilities Non Current4.8 B5.8 B
Significantly Down
Increasing
Slightly volatile
Total Debt4.5 B5.3 B
Fairly Down
Increasing
Slightly volatile
Debt Current665.1 M589.8 M
Moderately Up
Increasing
Slightly volatile
Debt Non Current3.8 B4.7 B
Significantly Down
Increasing
Slightly volatile
Operating Income1.9 B2.1 B
Moderately Down
Increasing
Slightly volatile
Gross Margin0.540.52
Sufficiently Up
Increasing
Slightly volatile

Hershey Foods Corp Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Hershey Foods' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Hershey Foods in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Hershey Foods' degree of accounting gimmicks and manipulations.

About Hershey Foods Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Expenses

2.28 BillionShare
Hershey Foods Operating Expenses is fairly stable at the moment as compared to the past year. Hershey Foods reported Operating Expenses of 2.21 Billion in 2021

Hershey Foods Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Hershey Foods. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues7.52 B7.79 B7.99 B8.15 B9.37 B9.19 B
Total Assets5.55 B7.7 B8.14 B9.13 B10.5 B9.09 B
Current Assets2 B2.24 B2.12 B2.98 B3.42 B3.07 B
Assets Non Current3.55 B5.46 B6.02 B6.15 B7.08 B6.02 B
Total Liabilities4.62 B6.3 B6.4 B6.89 B7.93 B6.97 B
Current Liabilities2.08 B2.42 B2.01 B1.89 B2.18 B2.22 B
Total Debt2.92 B4.46 B4.27 B4.6 B5.29 B4.5 B
Debt Current859.46 M1.2 B735.67 M512.87 M589.8 M665.05 M
Debt Non Current2.06 B3.25 B3.53 B4.09 B4.7 B3.83 B
Operating Income1.31 B1.62 B1.6 B1.78 B2.05 B1.86 B

About Hershey Foods Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Hershey Foods Corp's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Hershey Foods using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Hershey Foods Corp based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
The Hershey Company, together with its subsidiaries, manufactures and sells confectionery products and pantry items. The company was founded in 1894 and is headquartered in Hershey, Pennsylvania. Hershey Foods operates under Confectioners classification in the United States and is traded on New York Stock Exchange. It employs 15200 people.

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Please check Hershey Foods Piotroski F Score and Hershey Foods Altman Z Score analysis. Note that the Hershey Foods Corp information on this page should be used as a complementary analysis to other Hershey Foods' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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Is Hershey Foods' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Hershey Foods. If investors know Hershey will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Hershey Foods listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Hershey Foods Corp is measured differently than its book value, which is the value of Hershey that is recorded on the company's balance sheet. Investors also form their own opinion of Hershey Foods' value that differs from its market value or its book value, called intrinsic value, which is Hershey Foods' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Hershey Foods' market value can be influenced by many factors that don't directly affect Hershey Foods' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Hershey Foods' value and its price as these two are different measures arrived at by different means. Investors typically determine Hershey Foods value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Hershey Foods' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.