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Charter Communications Inc (NAS:CHTR)
Beneish M-Score
-2.91 (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.

Charter Communications Inc has a M-score of -2.91 suggests that the company is not a manipulator.

CHTR' s 10-Year Beneish M-Score Range
Min: -6.77   Max: 13.66
Current: -2.91

-6.77
13.66

During the past 13 years, the highest Beneish M-Score of Charter Communications Inc was 13.66. The lowest was -6.77. And the median was -2.96.


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 Charter Communications Inc 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 * 1.1079+0.528 * 0.9972+0.404 * 0.6863+0.892 * 1.0981+0.115 * 0.9503
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9855+4.679 * -0.1029-0.327 * 1.0234
=-2.91

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $264 Mil.
Revenue was 2362 + 2360 + 2287 + 2259 = $9,268 Mil.
Gross Profit was 1169 + 1201 + 1132 + 1124 = $4,626 Mil.
Total Current Assets was $7,502 Mil.
Total Assets was $24,410 Mil.
Property, Plant and Equipment(Net PPE) was $8,275 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,111 Mil.
Selling, General & Admin. Expense(SGA) was $553 Mil.
Total Current Liabilities was $8,569 Mil.
Long-Term Debt was $13,981 Mil.
Net Income was -81 + -48 + -53 + -45 = $-227 Mil.
Non Operating Income was -6 + -4 + 5 + -20 = $-25 Mil.
Cash Flow from Operations was 528 + 630 + 520 + 632 = $2,310 Mil.
Accounts Receivable was $217 Mil.
Revenue was 2202 + 2148 + 2118 + 1972 = $8,440 Mil.
Gross Profit was 1089 + 1087 + 1048 + 977 = $4,201 Mil.
Total Current Assets was $304 Mil.
Total Assets was $17,297 Mil.
Property, Plant and Equipment(Net PPE) was $8,079 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,934 Mil.
Selling, General & Admin. Expense(SGA) was $511 Mil.
Total Current Liabilities was $1,523 Mil.
Long-Term Debt was $14,090 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)
=(264 / 9268) / (217 / 8440)
=0.02848511 / 0.0257109
=1.1079

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)
=(1201 / 8440) / (1169 / 9268)
=0.49774882 / 0.49913681
=0.9972

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 - (7502 + 8275) / 24410) / (1 - (304 + 8079) / 17297)
=0.35366653 / 0.51534948
=0.6863

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
=9268 / 8440
=1.0981

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))
=(1934 / (1934 + 8079)) / (2111 / (2111 + 8275))
=0.19314891 / 0.20325438
=0.9503

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)
=(553 / 9268) / (511 / 8440)
=0.05966767 / 0.06054502
=0.9855

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)
=((13981 + 8569) / 24410) / ((14090 + 1523) / 17297)
=0.92380172 / 0.90264208
=1.0234

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
=(-227 - -25 - 2310) / 24410
=-0.1029

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.

Charter Communications Inc has a M-score of -2.91 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 own currency.

Charter Communications Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec10Dec11Dec12Dec13Dec14
DSRI 1.01781.06520.83321.05810.9141.02121.06320.83821.0905
GMI 1.02381.03341.00940.98860.99021.11120.99581.45960.9948
AQI 0.90341.05521.01180.99540.8790.98570.98150.96591.2383
SGI 0.98781.05741.09361.09051.07951.08951.02051.04161.1169
DEPI 0.89350.94030.98661.00250.99261.13890.9740.97640.9394
SGAI 1.03490.99181.05271.01461.00690.25940.957600.9706
LVGI 1.25421.07281.0771.07441.14310.51211.05641.00171.0201
TATA -0.1437-0.1065-0.1082-0.1111-0.2026-0.1322-0.1255-0.1362-0.1033
M-score -3.27-2.86-3.08-2.90-3.54-2.64-3.01-2.83-2.69

Charter Communications Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.83820.86090.83390.86740.99471.02291.09051.1079
GMI 1.45961.31381.06510.83520.77310.85380.92650.9972
AQI 0.96590.96010.97091.06790.99831.11621.23830.6863
SGI 1.04161.04591.04461.06671.1361.12321.11691.0981
DEPI 0.97640.98580.97940.99790.97480.94520.93940.9503
SGAI 00-0.3753-0.34583.93881.90571.2530.9855
LVGI 1.00171.0041.00571.00450.99521.00671.02011.0234
TATA -0.1362-0.1361-0.1381-0.1274-0.1397-0.1148-0.1027-0.1029
M-score -2.83-2.89-2.98-2.97-3.64-3.08-2.77-2.91
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