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Cincinnati Bell Inc (NYSE:CBB)
Beneish M-Score
-3.66 (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 -3.66 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: -3.66

-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 -2.84.


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 * 0.8191+0.528 * 1.0174+0.404 * 0.5582+0.892 * 0.9928+0.115 * 1.6928
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0747+4.679 * -0.2012-0.327 * 0.8745
=-3.66

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $139 Mil.
Revenue was 288.9 + 289.3 + 299.8 + 285.8 = $1,164 Mil.
Gross Profit was 126.2 + 122.7 + 124.2 + 123.6 = $497 Mil.
Total Current Assets was $188 Mil.
Total Assets was $1,445 Mil.
Property, Plant and Equipment(Net PPE) was $995 Mil.
Depreciation, Depletion and Amortization(DDA) was $152 Mil.
Selling, General & Admin. Expense(SGA) was $222 Mil.
Total Current Liabilities was $253 Mil.
Long-Term Debt was $1,226 Mil.
Net Income was 7 + 32.6 + 80.3 + 191.6 = $312 Mil.
Non Operating Income was 2.4 + 40.1 + 108.7 + 280.4 = $432 Mil.
Cash Flow from Operations was 66 + 16.2 + 62 + 26.4 = $171 Mil.
Accounts Receivable was $170 Mil.
Revenue was 292.9 + 294.9 + 301.4 + 283 = $1,172 Mil.
Gross Profit was 126.7 + 121.5 + 131.9 + 128.9 = $509 Mil.
Total Current Assets was $326 Mil.
Total Assets was $1,733 Mil.
Property, Plant and Equipment(Net PPE) was $846 Mil.
Depreciation, Depletion and Amortization(DDA) was $245 Mil.
Selling, General & Admin. Expense(SGA) was $208 Mil.
Total Current Liabilities was $279 Mil.
Long-Term Debt was $1,749 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)
=(138.5 / 1163.8) / (170.3 / 1172.2)
=0.1190067 / 0.14528238
=0.8191

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)
=(122.7 / 1172.2) / (126.2 / 1163.8)
=0.43422624 / 0.42679154
=1.0174

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 - (188.3 + 995) / 1444.6) / (1 - (325.7 + 845.7) / 1733)
=0.18088052 / 0.32406232
=0.5582

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
=1163.8 / 1172.2
=0.9928

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))
=(245.3 / (245.3 + 845.7)) / (152.4 / (152.4 + 995))
=0.2248396 / 0.13282203
=1.6928

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)
=(221.5 / 1163.8) / (207.6 / 1172.2)
=0.1903248 / 0.17710288
=1.0747

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)
=((1226 + 252.5) / 1444.6) / ((1748.8 + 279.4) / 1733)
=1.0234667 / 1.17034045
=0.8745

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
=(311.5 - 431.6 - 170.6) / 1444.6
=-0.2012

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 -3.66 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 0.95831.02670.89811.01831.11770.91710.18365.21691.07061.0544
GMI 1.04331.00851.00720.97550.9941.0451.01541.08251.07811.0641
AQI 1.01930.90370.90880.86891.33790.91051.01121.22290.89420.4733
SGI 1.051.06181.04030.95221.03071.0621.00790.85281.01690.9136
DEPI 1.2051.06931.08261.00341.02970.9970.53011.48720.71641.486
SGAI 1.05231.02551.03031.01260.95650.91451.01631.15310.84421.0609
LVGI 0.93860.96980.9491.01650.96460.99170.50652.21620.97110.8884
TATA -0.1254-0.1178-0.1495-0.0802-0.0847-0.0996-0.1538-0.0448-0.1458-0.1258
M-score -3.00-2.97-3.25-2.95-2.58-2.96-3.830.82-3.08-3.19

Cincinnati Bell Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 6.10871.66731.58121.50571.00610.84530.77770.75910.95810.8191
GMI 1.1051.10931.11531.12571.07851.0741.06141.04131.0391.0174
AQI 1.22290.91350.66080.78130.89420.72770.7120.61740.47330.5582
SGI 0.72830.71680.7250.74931.08211.13821.17391.18351.00540.9928
DEPI 1.48721.26921.04490.88440.71640.69730.90341.1271.4861.6928
SGAI 1.15550.89560.82840.85330.81780.94461.01741.01581.06771.0747
LVGI 2.21621.04870.99641.03940.97110.97990.95860.88310.88840.8745
TATA -0.0458-0.0241-0.0929-0.1108-0.147-0.1095-0.1138-0.1557-0.1258-0.2012
M-score 1.54-2.18-2.67-2.78-3.08-3.10-3.15-3.35-3.21-3.66
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