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Cincinnati Bell Inc (NYSE:CBB)
Beneish M-Score
-3.18 (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.

Cincinnati Bell Inc has a M-score of -3.18 suggests that the company is not a manipulator.

CBB' s Beneish M-Score Range Over the Past 10 Years
Min: -11.56   Max: 3.33
Current: -3.18

-11.56
3.33

During the past 13 years, the highest Beneish M-Score of Cincinnati Bell Inc was 3.33. The lowest was -11.56. And the median was -2.88.


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 Cincinnati Bell 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 * 1.0381+0.528 * 0.9941+0.404 * 0.561+0.892 * 1.014+0.115 * 1.2138
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.021+4.679 * -0.1313-0.327 * 0.9254
=-3.18

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $172 Mil.
Revenue was 312.4 + 299.2 + 288.9 + 289.3 = $1,190 Mil.
Gross Profit was 128.6 + 128.4 + 126.2 + 122.7 = $506 Mil.
Total Current Assets was $314 Mil.
Total Assets was $1,530 Mil.
Property, Plant and Equipment(Net PPE) was $1,053 Mil.
Depreciation, Depletion and Amortization(DDA) was $174 Mil.
Selling, General & Admin. Expense(SGA) was $223 Mil.
Total Current Liabilities was $354 Mil.
Long-Term Debt was $1,126 Mil.
Net Income was 18.8 + 77.6 + 7 + 32.6 = $136 Mil.
Non Operating Income was 22 + 114.5 + 2.4 + 40.1 = $179 Mil.
Cash Flow from Operations was 43.6 + 32.1 + 66 + 16.2 = $158 Mil.
Accounts Receivable was $164 Mil.
Revenue was 299.8 + 285.8 + 292.9 + 294.9 = $1,173 Mil.
Gross Profit was 124.2 + 123.6 + 126.7 + 121.5 = $496 Mil.
Total Current Assets was $251 Mil.
Total Assets was $1,460 Mil.
Property, Plant and Equipment(Net PPE) was $930 Mil.
Depreciation, Depletion and Amortization(DDA) was $193 Mil.
Selling, General & Admin. Expense(SGA) was $215 Mil.
Total Current Liabilities was $290 Mil.
Long-Term Debt was $1,236 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)
=(172.2 / 1189.8) / (163.6 / 1173.4)
=0.14473021 / 0.1394239
=1.0381

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)
=(496 / 1173.4) / (505.9 / 1189.8)
=0.42270326 / 0.42519751
=0.9941

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 - (313.6 + 1052.6) / 1529.9) / (1 - (251.3 + 930.4) / 1460.2)
=0.10700046 / 0.1907273
=0.561

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
=1189.8 / 1173.4
=1.014

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))
=(193.4 / (193.4 + 930.4)) / (173.9 / (173.9 + 1052.6))
=0.17209468 / 0.14178557
=1.2138

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)
=(222.9 / 1189.8) / (215.3 / 1173.4)
=0.18734241 / 0.18348389
=1.021

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)
=((1125.5 + 354.3) / 1529.9) / ((1236.3 + 289.9) / 1460.2)
=0.96725276 / 1.04519929
=0.9254

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
=(136 - 179 - 157.9) / 1529.9
=-0.1313

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.

Cincinnati Bell Inc has a M-score of -3.18 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.

Cincinnati Bell Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.95831.02670.89811.01831.11777.38090.02286.10871.00610.9581
GMI 1.04331.00851.00720.97550.9940.5611.89691.1051.07851.039
AQI 1.01930.90370.90880.86891.33790.91051.01121.22290.89420.4623
SGI 1.051.06181.04030.95221.03070.1328.11170.72831.08211.0054
DEPI 1.2051.06931.08261.00341.02973.26130.16211.48720.71641.486
SGAI 1.05231.02551.03031.01260.95652.46740.38551.15550.81781.0677
LVGI 0.93860.96980.9491.01650.96460.99170.50652.21620.97110.8875
TATA -0.1254-0.1178-0.1495-0.0802-0.0847-0.0232-0.1538-0.0458-0.147-0.1265
M-score -3.00-2.97-3.25-2.95-2.582.252.891.54-3.08-3.22

Cincinnati Bell Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.58121.50571.00610.84530.77770.75910.95810.81911.01291.0381
GMI 1.11531.12571.07851.0741.06141.04131.0391.01741.00630.9941
AQI 0.66080.78130.89420.72770.7120.61740.46230.55820.59630.561
SGI 0.7250.74931.08211.13821.17391.18351.00540.99281.00191.014
DEPI 1.04490.88440.71640.69730.90341.1271.4861.69281.4281.2138
SGAI 0.82840.85330.81780.94461.01741.01581.06771.07471.02411.021
LVGI 0.99641.03940.97110.97990.95860.88310.88750.87450.88790.9254
TATA -0.0929-0.1108-0.147-0.1095-0.1138-0.1557-0.1265-0.2012-0.1718-0.1313
M-score -2.67-2.78-3.08-3.10-3.15-3.35-3.22-3.66-3.35-3.18
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