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Cincinnati Bell Inc (NYSE:CBB)
Beneish M-Score
-3.21 (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 -3.21 suggests that the company is not a manipulator.

CBB' s Beneish M-Score Range Over the Past 10 Years
Min: -4.65   Max: 2.89
Current: -3.21

-4.65
2.89

During the past 13 years, the highest Beneish M-Score of Cincinnati Bell Inc was 2.89. The lowest was -4.65. And the median was -2.96.


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 * 0.9581+0.528 * 1.039+0.404 * 0.4733+0.892 * 1.0054+0.115 * 1.486
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0677+4.679 * -0.1258-0.327 * 0.8884
=-3.21

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $155 Mil.
Revenue was 289.3 + 299.8 + 285.8 + 292.9 = $1,168 Mil.
Gross Profit was 122.7 + 124.2 + 123.6 + 126.7 = $497 Mil.
Total Current Assets was $200 Mil.
Total Assets was $1,454 Mil.
Property, Plant and Equipment(Net PPE) was $976 Mil.
Depreciation, Depletion and Amortization(DDA) was $170 Mil.
Selling, General & Admin. Expense(SGA) was $221 Mil.
Total Current Liabilities was $259 Mil.
Long-Term Debt was $1,234 Mil.
Net Income was 32.6 + 80.3 + 191.6 + 49.2 = $354 Mil.
Non Operating Income was 40.1 + 108.7 + 280.4 + -3.5 = $426 Mil.
Cash Flow from Operations was 16.2 + 62 + 26.4 + 6.3 = $111 Mil.
Accounts Receivable was $161 Mil.
Revenue was 294.9 + 301.4 + 283 + 282.2 = $1,162 Mil.
Gross Profit was 121.5 + 131.9 + 128.9 + 131.5 = $514 Mil.
Total Current Assets was $269 Mil.
Total Assets was $1,821 Mil.
Property, Plant and Equipment(Net PPE) was $815 Mil.
Depreciation, Depletion and Amortization(DDA) was $231 Mil.
Selling, General & Admin. Expense(SGA) was $205 Mil.
Total Current Liabilities was $411 Mil.
Long-Term Debt was $1,693 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)
=(154.9 / 1167.8) / (160.8 / 1161.5)
=0.13264258 / 0.13844167
=0.9581

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)
=(124.2 / 1161.5) / (122.7 / 1167.8)
=0.44235902 / 0.42575784
=1.039

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 - (200.4 + 975.5) / 1454.4) / (1 - (268.7 + 815.4) / 1820.7)
=0.1914879 / 0.40456967
=0.4733

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
=1167.8 / 1161.5
=1.0054

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))
=(231 / (231 + 815.4)) / (170.2 / (170.2 + 975.5))
=0.22075688 / 0.14855547
=1.486

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)
=(220.5 / 1167.8) / (205.4 / 1161.5)
=0.18881658 / 0.17684029
=1.0677

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)
=((1233.5 + 259.2) / 1454.4) / ((1692.6 + 410.8) / 1820.7)
=1.02633388 / 1.15526995
=0.8884

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
=(353.7 - 425.7 - 110.9) / 1454.4
=-0.1258

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 -3.21 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

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 1.01930.90370.90880.86891.33790.91051.01121.22290.89420.4733
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 0.93860.96980.9491.01650.96460.99170.50652.21620.97110.8884
TATA -0.1258-0.1178-0.1495-0.0802-0.0847-0.0232-0.1538-0.0458-0.147-0.1258
M-score -3.00-2.97-3.25-2.95-2.582.252.891.54-3.08-3.21

Cincinnati Bell Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.11576.10871.66731.58121.50571.00610.84530.77770.75910.9581
GMI 1.94141.1051.10931.11531.12571.07851.0741.06141.04131.039
AQI 1.13771.22290.91350.66080.78130.89420.72770.7120.61740.4733
SGI 7.19910.72830.71680.7250.74931.08211.13821.17391.18351.0054
DEPI 0.25611.48721.26921.04490.88440.71640.69730.90341.1271.486
SGAI 0.42381.15550.89560.82840.85330.81780.94461.01741.01581.0677
LVGI 1.0752.21621.04870.99641.03940.97110.97990.95860.88310.8884
TATA -0.0523-0.0458-0.0241-0.0929-0.1108-0.147-0.1095-0.1138-0.1557-0.1258
M-score 2.531.54-2.18-2.67-2.78-3.08-3.10-3.15-3.35-3.21
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