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Cincinnati Bell Inc (NYSE:CBB)
Beneish M-Score
-3.12 (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 -3.12 suggests that the company is not a manipulator.

CBB' s 10-Year Beneish M-Score Range
Min: -5.01   Max: 11.61
Current: -3.12

-5.01
11.61

During the past 13 years, the highest Beneish M-Score of Cincinnati Bell Inc was 11.61. The lowest was -5.01. And the median was -2.85.


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 * 0.9343+0.528 * 1.0862+0.404 * 0.712+0.892 * 1.0254+0.115 * 0.9034
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0352+4.679 * -0.1136-0.327 * 0.9586
=-3.12

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $155 Mil.
Revenue was 285.8 + 292.9 + 308.3 + 327.5 = $1,215 Mil.
Gross Profit was 123.6 + 126.7 + 124.6 + 148 = $523 Mil.
Total Current Assets was $273 Mil.
Total Assets was $1,510 Mil.
Property, Plant and Equipment(Net PPE) was $895 Mil.
Depreciation, Depletion and Amortization(DDA) was $219 Mil.
Selling, General & Admin. Expense(SGA) was $226 Mil.
Total Current Liabilities was $273 Mil.
Long-Term Debt was $1,379 Mil.
Net Income was 191.6 + 49.2 + -18.3 + -27.3 = $195 Mil.
Non Operating Income was 280.4 + -3.5 + -5.1 + -19.2 = $253 Mil.
Cash Flow from Operations was 26.4 + 6.3 + 54.4 + 27 = $114 Mil.
Accounts Receivable was $162 Mil.
Revenue was 283 + 282.2 + 308.4 + 310.8 = $1,184 Mil.
Gross Profit was 128.9 + 131.5 + 142.6 + 150.9 = $554 Mil.
Total Current Assets was $608 Mil.
Total Assets was $2,177 Mil.
Property, Plant and Equipment(Net PPE) was $875 Mil.
Depreciation, Depletion and Amortization(DDA) was $189 Mil.
Selling, General & Admin. Expense(SGA) was $213 Mil.
Total Current Liabilities was $271 Mil.
Long-Term Debt was $2,214 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)
=(155.2 / 1214.5) / (162 / 1184.4)
=0.12778921 / 0.13677812
=0.9343

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)
=(126.7 / 1184.4) / (123.6 / 1214.5)
=0.46766295 / 0.43054755
=1.0862

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 - (272.5 + 894.5) / 1509.6) / (1 - (608.3 + 874.7) / 2176.9)
=0.22694754 / 0.31875603
=0.712

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
=1214.5 / 1184.4
=1.0254

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))
=(189 / (189 + 874.7)) / (219 / (219 + 894.5))
=0.17768168 / 0.19667714
=0.9034

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)
=(226.1 / 1214.5) / (213 / 1184.4)
=0.18616715 / 0.17983789
=1.0352

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)
=((1379 + 272.7) / 1509.6) / ((2214.2 + 270.6) / 2176.9)
=1.0941309 / 1.14143966
=0.9586

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
=(195.2 - 252.6 - 114.1) / 1509.6
=-0.1136

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 -3.12 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 own currency.

Cincinnati Bell Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.15520.95831.02670.89811.01831.11770.91711.22570.78151.0752
GMI 1.04291.04331.00851.00720.97550.9941.0450.53692.04741.0781
AQI 0.9541.01930.90370.90880.86891.33790.91051.01121.22290.7575
SGI 1.00211.051.06181.04030.95221.03071.0620.1515.69251.0169
DEPI 1.00221.2051.06931.08261.00341.02970.9971.32550.59480.7466
SGAI 0.9691.05231.02551.03031.01260.95650.91452.96550.39520.8442
LVGI 1.02610.93860.96980.9491.01650.96460.99170.50652.21621.0074
TATA -0.1339-0.1258-0.1178-0.1495-0.0802-0.0847-0.0996-0.0535-0.0448-0.1459
M-score -2.96-3.00-2.97-3.25-2.95-2.58-2.96-3.661.60-3.14

Cincinnati Bell Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 6.7088.74816.53650.78150.16930.11760.06621.14430.97180.9343
GMI 0.52330.46920.37572.05852.13522.42173.0911.09461.09431.0862
AQI 1.33011.36861.13771.22290.91350.66080.78130.75750.72770.712
SGI 0.12540.0870.04795.69256.60539.289417.13410.95550.99861.0254
DEPI 1.61122.04622.83180.59480.49150.33930.22540.74660.69730.9034
SGAI 4.33666.28849.56450.39520.23960.16160.10490.85460.96861.0352
LVGI 1.07411.07881.0752.21621.04870.99641.03941.00740.97990.9586
TATA -0.0617-0.0235-0.0047-0.0448-0.0232-0.092-0.1099-0.1469-0.1093-0.1136
M-score 1.062.789.381.602.274.3511.61-3.13-3.10-3.12
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