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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 0.84. The lowest was -4.72. And the median was -2.71.
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 * 0.5854||+||0.528 * 0.8385||+||0.404 * 0.8699||+||0.892 * 1.146||+||0.115 * 1.0421|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9077||+||4.679 * -0.055||-||0.327 * 0.9111|
|This Year (Jun15) TTM:||Last Year (Jun14) TTM:|
|Accounts Receivable was $46.8 Mil.|
Revenue was 106.635 + 77.525 + 129.315 + 81.3 = $394.8 Mil.
Gross Profit was 45.945 + 29.079 + 45.399 + 28.406 = $148.8 Mil.
Total Current Assets was $253.4 Mil.
Total Assets was $512.9 Mil.
Property, Plant and Equipment(Net PPE) was $172.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.7 Mil.
Selling, General & Admin. Expense(SGA) was $54.1 Mil.
Total Current Liabilities was $108.9 Mil.
Long-Term Debt was $60.0 Mil.
Net Income was 19.663 + 7.993 + 27.885 + 8.769 = $64.3 Mil.
Non Operating Income was -0.232 + 0.062 + -0.016 + 0.037 = $-0.1 Mil.
Cash Flow from Operations was 4.832 + 35.372 + 23.597 + 28.841 = $92.6 Mil.
|Accounts Receivable was $69.8 Mil.
Revenue was 97.893 + 66.105 + 103.036 + 77.452 = $344.5 Mil.
Gross Profit was 33.415 + 16.578 + 33.938 + 24.966 = $108.9 Mil.
Total Current Assets was $213.0 Mil.
Total Assets was $476.1 Mil.
Property, Plant and Equipment(Net PPE) was $170.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.4 Mil.
Selling, General & Admin. Expense(SGA) was $52.0 Mil.
Total Current Liabilities was $98.1 Mil.
Long-Term Debt was $74.0 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)|
|=||(46.793 / 394.775)||/||(69.751 / 344.486)|
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)|
|=||(29.079 / 344.486)||/||(45.945 / 394.775)|
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 - (253.359 + 172.417) / 512.856)||/||(1 - (212.982 + 170.164) / 476.07)|
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))|
|=||(23.436 / (23.436 + 170.164))||/||(22.662 / (22.662 + 172.417))|
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)|
|=||(54.125 / 394.775)||/||(52.035 / 344.486)|
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)|
|=||((60 + 108.945) / 512.856)||/||((74 + 98.122) / 476.07)|
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|
|=||(64.31 - -0.149||-||92.642)||/||512.856|
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 -3.08 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