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Charter Communications Inc (NAS:CHTR)
Beneish M-Score
-2.88 (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 -2.88 suggests that the company is not a manipulator.

CHTR' s Beneish M-Score Range Over the Past 10 Years
Min: -6.77   Max: 13.66
Current: -2.88

-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 * 1.002+0.528 * 0.8029+0.404 * 1.3046+0.892 * 1.0794+0.115 * 0.9803
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.9556+4.679 * -0.0659-0.327 * 1.04
=-2.88

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $292 Mil.
Revenue was 2450 + 2430 + 2362 + 2360 = $9,602 Mil.
Gross Profit was 830 + 1229 + 1169 + 2242 = $5,470 Mil.
Total Current Assets was $406 Mil.
Total Assets was $36,873 Mil.
Property, Plant and Equipment(Net PPE) was $8,281 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,114 Mil.
Selling, General & Admin. Expense(SGA) was $838 Mil.
Total Current Liabilities was $1,829 Mil.
Long-Term Debt was $33,281 Mil.
Net Income was 54 + -122 + -81 + -48 = $-197 Mil.
Non Operating Income was -8 + -127 + -6 + -4 = $-145 Mil.
Cash Flow from Operations was 689 + 531 + 528 + 630 = $2,378 Mil.
Accounts Receivable was $270 Mil.
Revenue was 2287 + 2259 + 2202 + 2148 = $8,896 Mil.
Gross Profit was 769 + 1124 + 1089 + 1087 = $4,069 Mil.
Total Current Assets was $370 Mil.
Total Assets was $20,950 Mil.
Property, Plant and Equipment(Net PPE) was $8,305 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,068 Mil.
Selling, General & Admin. Expense(SGA) was $397 Mil.
Total Current Liabilities was $1,586 Mil.
Long-Term Debt was $17,595 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)
=(292 / 9602) / (270 / 8896)
=0.03041033 / 0.03035072
=1.002

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)
=(1229 / 8896) / (830 / 9602)
=0.45739658 / 0.56967298
=0.8029

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 - (406 + 8281) / 36873) / (1 - (370 + 8305) / 20950)
=0.76440756 / 0.58591885
=1.3046

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
=9602 / 8896
=1.0794

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))
=(2068 / (2068 + 8305)) / (2114 / (2114 + 8281))
=0.19936373 / 0.203367
=0.9803

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)
=(838 / 9602) / (397 / 8896)
=0.08727348 / 0.0446268
=1.9556

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)
=((33281 + 1829) / 36873) / ((17595 + 1586) / 20950)
=0.95218724 / 0.91556086
=1.04

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
=(-197 - -145 - 2378) / 36873
=-0.0659

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 -2.88 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

Dec05Dec06Dec07Dec08Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.06520.83321.05810.9141.02121.06320.83820.92021.09050.9141
GMI 1.03341.00940.98860.99021.11121.39740.7311.00970.99481.0009
AQI 1.05521.01180.99540.8790.98570.98150.96591.0061.23831.2099
SGI 1.05741.09361.09051.07951.08951.02051.04161.08681.11691.0709
DEPI 0.94030.98661.00250.99261.13890.9740.97641.01880.93940.9887
SGAI 0.99181.05271.01461.00690.25940.95761.06921.04190.97061.2303
LVGI 1.07281.0771.07441.14310.51211.05641.00171.00561.02011.0388
TATA -0.1065-0.1082-0.1111-0.2026-0.1322-0.1255-0.1363-0.1281-0.1033-0.0634
M-score -2.86-3.08-2.90-3.54-2.64-2.80-3.40-3.07-2.69-2.76

Charter Communications Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.86740.99471.02291.09051.10791.17771.0020.9141
GMI 0.37391.06521.23860.80620.86970.86940.80291.2396
AQI 1.06790.99831.11621.23830.68630.97841.30461.2099
SGI 1.06671.1361.12321.11691.09811.08161.07941.0709
DEPI 0.99790.97480.94520.93940.95030.97210.98030.9887
SGAI -0.34583.93881.41951.88781.46311.46741.95560.5635
LVGI 1.00450.99521.00671.02011.02340.99691.041.0388
TATA -0.1275-0.1405-0.1155-0.1033-0.1035-0.1375-0.0659-0.0634
M-score -3.21-3.49-2.80-2.95-3.07-3.05-2.88-2.52
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