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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.
During the past 13 years, the highest Beneish M-Score of Cambrex Corp was -0.02. The lowest was -4.74. And the median was -2.66.
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 Cambrex Corp 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 * 1.0746||+||0.528 * 0.9811||+||0.404 * 0.9969||+||0.892 * 1.1323||+||0.115 * 1.0369|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9222||+||4.679 * -0.0679||-||0.327 * 0.6076|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $110.6 Mil.|
Revenue was 177.866 + 99.399 + 118.638 + 94.741 = $490.6 Mil.
Gross Profit was 79.167 + 37.602 + 48.557 + 38.899 = $204.2 Mil.
Total Current Assets was $322.7 Mil.
Total Assets was $611.9 Mil.
Property, Plant and Equipment(Net PPE) was $217.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.7 Mil.
Selling, General & Admin. Expense(SGA) was $60.4 Mil.
Total Current Liabilities was $95.5 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 37.384 + 9.218 + 20.494 + 14.582 = $81.7 Mil.
Non Operating Income was 0.046 + 0.071 + -0.272 + 0.076 = $-0.1 Mil.
Cash Flow from Operations was 11.443 + 47.214 + -25.15 + 89.771 = $123.3 Mil.
|Accounts Receivable was $90.9 Mil.
Revenue was 156.187 + 92.979 + 106.635 + 77.525 = $433.3 Mil.
Gross Profit was 66.261 + 35.68 + 45.945 + 29.079 = $177.0 Mil.
Total Current Assets was $259.3 Mil.
Total Assets was $505.5 Mil.
Property, Plant and Equipment(Net PPE) was $186.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.1 Mil.
Selling, General & Admin. Expense(SGA) was $57.9 Mil.
Total Current Liabilities was $129.8 Mil.
Long-Term Debt was $0.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(110.622 / 490.644)||/||(90.92 / 433.326)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(176.965 / 433.326)||/||(204.225 / 490.644)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (322.655 + 217.092) / 611.865)||/||(1 - (259.279 + 186.487) / 505.539)|
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.
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))|
|=||(22.061 / (22.061 + 186.487))||/||(24.665 / (24.665 + 217.092))|
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)|
|=||(60.422 / 490.644)||/||(57.867 / 433.326)|
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)|
|=||((0 + 95.462) / 611.865)||/||((0 + 129.802) / 505.539)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(81.678 - -0.079||-||123.278)||/||611.865|
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.
Cambrex Corp has a M-score of -2.48 suggests that the company will not be a manipulator.
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
Cambrex Corp Annual Data
Cambrex Corp Quarterly Data