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GuruFocus has detected 7 Warning Signs with CBS Corp $CBS.
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CBS Corp (NYSE:CBS)
Beneish M-Score
-2.65 (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.

CBS Corp has a M-score of -2.65 suggests that the company is not a manipulator.

CBS' s Beneish M-Score Range Over the Past 10 Years
Min: -5.07   Max: -1.95
Current: -2.65

-5.07
-1.95

During the past 13 years, the highest Beneish M-Score of CBS Corp was -1.95. The lowest was -5.07. And the median was -2.60.


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 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 * 0.9634+0.528 * 1.0122+0.404 * 0.9994+0.892 * 0.9481+0.115 * 1.0306
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0031+4.679 * -0.017-0.327 * 1.049
=-2.65

* 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 $3,314 Mil.
Revenue was 2634 + 3396 + 3287 + 3849 = $13,166 Mil.
Gross Profit was 792 + 1499 + 1426 + 1493 = $5,210 Mil.
Total Current Assets was $6,063 Mil.
Total Assets was $24,238 Mil.
Property, Plant and Equipment(Net PPE) was $1,241 Mil.
Depreciation, Depletion and Amortization(DDA) was $225 Mil.
Selling, General & Admin. Expense(SGA) was $2,335 Mil.
Total Current Liabilities was $3,708 Mil.
Long-Term Debt was $8,902 Mil.
Net Income was -113 + 478 + 423 + 473 = $1,261 Mil.
Non Operating Income was -7 + 2 + -4 + -3 = $-12 Mil.
Cash Flow from Operations was 379 + 55 + 223 + 1028 = $1,685 Mil.
Accounts Receivable was $3,628 Mil.
Revenue was 3910 + 3257 + 3219 + 3500 = $13,886 Mil.
Gross Profit was 1477 + 1415 + 1312 + 1358 = $5,562 Mil.
Total Current Assets was $5,747 Mil.
Total Assets was $23,765 Mil.
Property, Plant and Equipment(Net PPE) was $1,405 Mil.
Depreciation, Depletion and Amortization(DDA) was $264 Mil.
Selling, General & Admin. Expense(SGA) was $2,455 Mil.
Total Current Liabilities was $3,560 Mil.
Long-Term Debt was $8,226 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)
=(3314 / 13166) / (3628 / 13886)
=0.25170895 / 0.26127034
=0.9634

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)
=(5562 / 13886) / (5210 / 13166)
=0.40054731 / 0.39571624
=1.0122

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 - (6063 + 1241) / 24238) / (1 - (5747 + 1405) / 23765)
=0.698655 / 0.69905323
=0.9994

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
=13166 / 13886
=0.9481

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))
=(264 / (264 + 1405)) / (225 / (225 + 1241))
=0.15817855 / 0.15347885
=1.0306

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)
=(2335 / 13166) / (2455 / 13886)
=0.17735075 / 0.17679677
=1.0031

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)
=((8902 + 3708) / 24238) / ((8226 + 3560) / 23765)
=0.52025745 / 0.49593941
=1.049

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
=(1261 - -12 - 1685) / 24238
=-0.017

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 -2.65 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 local exchange's currency.

CBS Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.9651.03591.13051.03670.98880.97470.95031.18411.04280.9634
GMI 1.00871.07431.14580.91860.87470.94961.02631.02241.03381.0122
AQI 1.04070.89270.98551.01160.99961.00791.01960.99510.9870.9994
SGI 0.98270.99130.93291.08031.01320.9891.08480.90331.00580.9481
DEPI 1.01180.89850.88740.980.96351.0361.01931.03511.03641.0306
SGAI 0.97440.98711.02250.97291.03970.96670.95720.99660.99141.0031
LVGI 1.08051.54320.9570.91260.98710.98521.03381.13891.13231.049
TATA -0.0224-0.5172-0.0252-0.0359-0.0163-0.008100.08580.0019-0.017
M-score -2.63-5.07-2.47-2.55-2.63-2.56-2.43-2.03-2.45-2.65

CBS Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.07231.161.12361.10281.05461.06441.05190.99920.9320.9634
GMI 1.03421.02161.04731.061.03441.03461.02340.99190.99241.0122
AQI 0.9780.99510.99970.97271.00560.9870.97791.00061.00090.9994
SGI 0.9780.9220.90970.94370.95360.98541.03631.03891.05750.9481
DEPI 0.86361.03511.18451.24311.14831.03640.91431.03911.03731.0306
SGAI 0.98250.99810.99290.99771.01970.98980.97320.97420.98141.0031
LVGI 1.12771.13891.02791.35311.16331.13231.08951.0371.02421.049
TATA 0.10780.08580.08770.07-0.00090.0019-0.0208-0.0072-0.0174-0.017
M-score -1.97-2.03-2.00-2.17-2.49-2.45-2.53-2.49-2.58-2.65
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