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Charter Communications Inc (NAS:CHTR)
Beneish M-Score
-3.02 (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 -3.02 suggests that the company is not a manipulator.

CHTR' s 10-Year Beneish M-Score Range
Min: -6.77   Max: 13.66
Current: -3.02

-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 -3.01.


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 * 1.1777+0.528 * 0.7666+0.404 * 0.9784+0.892 * 1.0816+0.115 * 0.9721
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9981+4.679 * -0.1375-0.327 * 0.9969
=-3.02

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $321 Mil.
Revenue was 2430 + 2362 + 2360 + 2287 = $9,439 Mil.
Gross Profit was 1229 + 1169 + 1201 + 1132 = $4,731 Mil.
Total Current Assets was $456 Mil.
Total Assets was $17,319 Mil.
Property, Plant and Equipment(Net PPE) was $8,244 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,111 Mil.
Selling, General & Admin. Expense(SGA) was $570 Mil.
Total Current Liabilities was $1,636 Mil.
Long-Term Debt was $13,896 Mil.
Net Income was -122 + -81 + -48 + -53 = $-304 Mil.
Non Operating Income was -127 + -6 + -4 + 5 = $-132 Mil.
Cash Flow from Operations was 531 + 528 + 630 + 520 = $2,209 Mil.
Accounts Receivable was $252 Mil.
Revenue was 2259 + 2202 + 2148 + 2118 = $8,727 Mil.
Gross Profit was 1124 + 755 + 753 + 721 = $3,353 Mil.
Total Current Assets was $337 Mil.
Total Assets was $17,369 Mil.
Property, Plant and Equipment(Net PPE) was $8,197 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,026 Mil.
Selling, General & Admin. Expense(SGA) was $528 Mil.
Total Current Liabilities was $1,606 Mil.
Long-Term Debt was $14,019 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)
=(321 / 9439) / (252 / 8727)
=0.03400784 / 0.0288759
=1.1777

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)
=(1169 / 8727) / (1229 / 9439)
=0.38420992 / 0.50121835
=0.7666

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 - (456 + 8244) / 17319) / (1 - (337 + 8197) / 17369)
=0.49766153 / 0.50866486
=0.9784

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
=9439 / 8727
=1.0816

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))
=(2026 / (2026 + 8197)) / (2111 / (2111 + 8244))
=0.19818057 / 0.20386287
=0.9721

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)
=(570 / 9439) / (528 / 8727)
=0.06038775 / 0.06050189
=0.9981

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)
=((13896 + 1636) / 17319) / ((14019 + 1606) / 17369)
=0.89681852 / 0.89959123
=0.9969

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
=(-304 - -132 - 2209) / 17319
=-0.1375

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 -3.02 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 1.01781.06520.83321.05810.9141.02121.0790.82590.92021.0905
GMI 1.02381.03341.00940.98860.99021.00551.00271.11661.46690.6904
AQI 0.90341.05521.01180.99540.8790.98570.98020.9671.00621.2383
SGI 0.98781.05741.09361.09051.07951.08951.02051.04161.08681.1169
DEPI 0.89350.94030.98661.00250.99261.13890.9740.97641.01880.9394
SGAI 1.03490.99181.05271.01461.00690.93160.98260.28411.06410.9706
LVGI 1.25421.07281.0771.07441.14310.51211.05581.0021.00581.0201
TATA -0.1437-0.1065-0.1082-0.1111-0.2026-0.1311-0.1255-0.1362-0.1271-0.1033
M-score -3.27-2.86-3.08-2.90-3.54-2.81-3.00-3.07-2.83-2.85

Charter Communications Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.86090.83390.86740.92020.93870.99471.02291.09051.10791.1777
GMI 1.23991.40611.59421.46691.31531.03780.82420.74510.68980.7666
AQI 0.96010.97091.06791.00621.00670.99831.11621.23830.68630.9784
SGI 1.04591.04461.06671.08681.11141.1361.12321.11691.09811.0816
DEPI 0.98580.97940.99791.01880.99640.97480.94520.93940.95030.9721
SGAI 0.0329-0.1323-0.28760.82429.1956-2.2672-1.03611.2530.98550.9981
LVGI 1.0041.00571.00451.00581.00070.99521.00671.02011.02340.9969
TATA -0.1361-0.1381-0.1268-0.1271-0.1313-0.1388-0.1146-0.1026-0.1029-0.1375
M-score -2.93-2.85-2.57-2.79-4.29-2.43-2.59-2.87-3.08-3.02
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