Smart for Life, Inc.
SMFL Consumer Defensive Packaged Foods
Operating cash flow growth for three consecutive years.
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Smart for Life, Inc. (SMFL) Beneish M-score
Smart for Life, Inc.'s Beneish M-score for fiscal 2023 is −6.39; values above −1.78 are the model's flag for possible earnings manipulation — a statistical screen, not a finding.
Beneish M-score, annual
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Annual newest first
| Period | Beneish M-score | Change (points) |
|---|---|---|
| FY2023 | −6.39 | (1.46) |
| FY2022 | −4.93 | (5.41) |
| FY2021 | 0.48 | 9.75 |
| FY2020 | −9.27 | — |
How fiscal 2023’s score is made up
| Component | This year | Year before | Result | Points |
|---|---|---|---|---|
| Days’ sales in receivables index | 1.44 | — | 1.33 | |
| Gross margin index | 0.85 | — | 0.45 | |
| Asset quality index | 1.01 | — | 0.41 | |
| Sales growth index | 0.52 | — | 0.46 | |
| Depreciation index | 0.98 | — | 0.11 | |
| SG&A index | 1.55 | — | −0.27 | |
| Total accruals to total assets | (0.78) | — | −3.63 | |
| Leverage index | 1.23 | — | −0.40 | |
| Beneish M-score | Low — no pattern the model associates with manipulation | −6.39 | ||
How the Beneish M-score works
M = −4.84 + 0.920 × DSRI + 0.528 × GMI + 0.404 × AQI + 0.892 × SGI + 0.115 × DEPI − 0.172 × SGAI + 4.679 × TATA − 0.327 × LVGI (Beneish, 1999): eight changes in the accounts from one fiscal year to the next, which the model weighs for the pattern seen in companies that later restated their earnings. Higher is worse.
| below −2.22 | Low — no pattern the model associates with manipulation |
|---|---|
| −2.22 to −1.78 | Elevated |
| above −1.78 | Flagged by the model |
−1.78 is the cut-off usually quoted from the paper, −2.22 a common conservative one. A statistical screen, not a finding of wrongdoing.
When asset quality, depreciation or SG&A cannot be worked out, that index is set to 1, as Beneish did, and the breakdown says so; with all three missing there is no score. Depreciation includes amortisation, and asset quality leaves out securities. Not worked out for banks, insurers and REITs.
Beneish M-score against peers
| Company | Beneish M-score |
|---|---|
| BSFCD Blue Star Foods Corp. compare | −14.7× |
| SMFL Smart for Life, Inc. | −6.4× |
| ATPC Agape ATP Corporation compare | −3.2× |
| CYAN Cyanotech Corporation compare | −2.4× |
| RKDA Arcadia Biosciences, Inc. compare | −1.8× |
| RGFC Real Good Food Company, Inc. compare | −1.2× |
| MEHA Functional Brands Inc. compare | −0.9× |
| ORISF Oriental Rise Holdings Limited compare | −0.7× |
| STKH Steakholder Foods Ltd. Sponsored ADR compare | — |
What Beneish M-score is
The Beneish M-Score combines eight year-on-year changes in the accounts into a statistical screen for patterns seen in companies that overstated earnings.
−4.84 + 0.920 × DSRI + 0.528 × GMI + 0.404 × AQI + 0.892 × SGI + 0.115 × DEPI − 0.172 × SGAI + 4.679 × TATA − 0.327 × LVGI