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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.
CBS Corp has a M-score of -2.41 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of CBS Corp was -1.32. The lowest was -5.07. And the median was -2.55.
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 CBS 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 * 0.9676||+||0.528 * 1.0134||+||0.404 * 1.0184||+||0.892 * 1.0348||+||0.115 * 0.576|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0033||+||4.679 * 0.0152||-||0.327 * 0.9157|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $3,002 Mil.|
Revenue was 3188 + 3856 + 3911 + 3634 = $14,589 Mil.
Gross Profit was 1390 + 1572 + 1608 + 1662 = $6,232 Mil.
Total Current Assets was $5,392 Mil.
Total Assets was $26,316 Mil.
Property, Plant and Equipment(Net PPE) was $1,424 Mil.
Depreciation, Depletion and Amortization(DDA) was $452 Mil.
Selling, General & Admin. Expense(SGA) was $2,633 Mil.
Total Current Liabilities was $3,321 Mil.
Long-Term Debt was $5,846 Mil.
Net Income was 439 + 468 + 470 + 494 = $1,871 Mil.
Non Operating Income was 6 + 5 + 8 + 7 = $26 Mil.
Cash Flow from Operations was 123 + 501 + 553 + 269 = $1,446 Mil.
|Accounts Receivable was $2,998 Mil.
Revenue was 3369 + 4040 + 3271 + 3418 = $14,098 Mil.
Gross Profit was 1477 + 1566 + 1483 + 1577 = $6,103 Mil.
Total Current Assets was $4,770 Mil.
Total Assets was $25,693 Mil.
Property, Plant and Equipment(Net PPE) was $2,228 Mil.
Depreciation, Depletion and Amortization(DDA) was $359 Mil.
Selling, General & Admin. Expense(SGA) was $2,536 Mil.
Total Current Liabilities was $3,825 Mil.
Long-Term Debt was $5,949 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)|
|=||(3002 / 14589)||/||(2998 / 14098)|
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)|
|=||(1572 / 14098)||/||(1390 / 14589)|
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 - (5392 + 1424) / 26316)||/||(1 - (4770 + 2228) / 25693)|
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))|
|=||(359 / (359 + 2228))||/||(452 / (452 + 1424))|
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)|
|=||(2633 / 14589)||/||(2536 / 14098)|
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)|
|=||((5846 + 3321) / 26316)||/||((5949 + 3825) / 25693)|
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|
|=||(1871 - 26||-||1446)||/||26316|
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.
CBS Corp has a M-score of -2.41 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
CBS Corp Annual Data
CBS Corp Quarterly Data