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Cincinnati Bell Inc (NYSE:CBB)
Beneish M-Score
-3.36 (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 -3.36 suggests that the company is not a manipulator.

CBB' s Beneish M-Score Range Over the Past 10 Years
Min: -5.01   Max: 11.29
Current: -3.36

-5.01
11.29

During the past 13 years, the highest Beneish M-Score of Cincinnati Bell Inc was 11.29. 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 * 0.8183+0.528 * 1.0463+0.404 * 0.6174+0.892 * 1.098+0.115 * 1.127
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0199+4.679 * -0.1542-0.327 * 0.8831
=-3.36

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $164 Mil.
Revenue was 299.8 + 285.8 + 292.9 + 411.6 = $1,290 Mil.
Gross Profit was 124.2 + 123.6 + 126.7 + 186.8 = $561 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 $237 Mil.
Total Current Liabilities was $290 Mil.
Long-Term Debt was $1,236 Mil.
Net Income was 80.3 + 191.6 + 49.2 + -18.3 = $303 Mil.
Non Operating Income was 108.7 + 280.4 + -3.5 + -6.8 = $379 Mil.
Cash Flow from Operations was 62 + 26.4 + 6.3 + 54.4 = $149 Mil.
Accounts Receivable was $182 Mil.
Revenue was 301.4 + 283 + 282.2 + 308.4 = $1,175 Mil.
Gross Profit was 131.9 + 128.9 + 131.5 + 142.6 = $535 Mil.
Total Current Assets was $474 Mil.
Total Assets was $1,953 Mil.
Property, Plant and Equipment(Net PPE) was $875 Mil.
Depreciation, Depletion and Amortization(DDA) was $211 Mil.
Selling, General & Admin. Expense(SGA) was $212 Mil.
Total Current Liabilities was $424 Mil.
Long-Term Debt was $1,887 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)
=(163.6 / 1290.1) / (182.1 / 1175)
=0.12681188 / 0.15497872
=0.8183

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)
=(123.6 / 1175) / (124.2 / 1290.1)
=0.45523404 / 0.43508255
=1.0463

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 - (251.3 + 930.4) / 1460.2) / (1 - (474.2 + 875.2) / 1952.6)
=0.1907273 / 0.30892144
=0.6174

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
=1290.1 / 1175
=1.098

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))
=(210.6 / (210.6 + 875.2)) / (193.4 / (193.4 + 930.4))
=0.19395837 / 0.17209468
=1.127

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)
=(237.4 / 1290.1) / (212 / 1175)
=0.18401674 / 0.18042553
=1.0199

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)
=((1236.3 + 289.9) / 1460.2) / ((1887 + 424.1) / 1952.6)
=1.04519929 / 1.18360135
=0.8831

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
=(302.8 - 378.8 - 149.1) / 1460.2
=-0.1542

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 -3.36 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 1.04291.04331.00851.00720.97550.9941.0450.53692.05851.0723
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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 8.74817.39890.78150.18090.12340.06731.07520.90580.83710.8183
GMI 0.46920.37572.05852.13522.42173.11481.07231.07051.06171.0463
AQI 1.36861.13771.22290.91350.66080.78130.75750.72770.7120.6174
SGI 0.0870.04795.69256.60539.289416.76181.01691.06221.09061.098
DEPI 2.04622.83180.59480.49150.33930.22540.74660.69730.90341.127
SGAI 6.28849.56450.39520.23960.16160.10360.84420.95681.02111.0199
LVGI 1.07881.0752.21621.04870.99641.03941.00740.97990.95860.8831
TATA -0.0235-0.0047-0.0448-0.0232-0.092-0.1098-0.1459-0.1082-0.1123-0.1542
M-score 2.7810.171.602.284.3611.29-3.14-3.11-3.16-3.36
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