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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 0.82. The lowest was -4.74. And the median was -2.70.
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 * 0.8483||+||0.528 * 0.9414||+||0.404 * 0.6281||+||0.892 * 1.1538||+||0.115 * 1.0871|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9147||+||4.679 * -0.0904||-||0.327 * 0.4727|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $38.0 Mil.|
Revenue was 99.399 + 118.638 + 94.741 + 156.187 = $469.0 Mil.
Gross Profit was 37.602 + 48.557 + 38.899 + 66.261 = $191.3 Mil.
Total Current Assets was $289.0 Mil.
Total Assets was $555.1 Mil.
Property, Plant and Equipment(Net PPE) was $209.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.5 Mil.
Selling, General & Admin. Expense(SGA) was $58.7 Mil.
Total Current Liabilities was $78.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 9.218 + 20.494 + 14.582 + 17.814 = $62.1 Mil.
Non Operating Income was 0.071 + -0.272 + 0.076 + -2.993 = $-3.1 Mil.
Cash Flow from Operations was 47.214 + -25.15 + 89.771 + 3.561 = $115.4 Mil.
|Accounts Receivable was $38.8 Mil.
Revenue was 92.979 + 106.635 + 77.525 + 129.315 = $406.5 Mil.
Gross Profit was 35.68 + 45.945 + 29.079 + 45.399 = $156.1 Mil.
Total Current Assets was $246.0 Mil.
Total Assets was $509.7 Mil.
Property, Plant and Equipment(Net PPE) was $180.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.2 Mil.
Selling, General & Admin. Expense(SGA) was $55.6 Mil.
Total Current Liabilities was $123.3 Mil.
Long-Term Debt was $30.0 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)|
|=||(37.995 / 468.965)||/||(38.82 / 406.454)|
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)|
|=||(156.103 / 406.454)||/||(191.319 / 468.965)|
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 - (289.02 + 209.213) / 555.06)||/||(1 - (246.002 + 180.598) / 509.683)|
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))|
|=||(22.231 / (22.231 + 180.598))||/||(23.458 / (23.458 + 209.213))|
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)|
|=||(58.651 / 468.965)||/||(55.573 / 406.454)|
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 + 78.921) / 555.06)||/||((30 + 123.305) / 509.683)|
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|
|=||(62.108 - -3.118||-||115.396)||/||555.06|
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 -2.89 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