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Charter Communications Inc (NAS:CHTR)
Beneish M-Score
-2.47 (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 -2.47 suggests that the company is not a manipulator.

CHTR' s Beneish M-Score Range Over the Past 10 Years
Min: -6.83   Max: 12.08
Current: -2.47

-6.83
12.08

During the past 13 years, the highest Beneish M-Score of Charter Communications Inc was 12.08. The lowest was -6.83. And the median was -3.04.


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 * 0.8952+0.528 * 0.9695+0.404 * 2.1363+0.892 * 1.0706+0.115 * 0.9873
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.5426+4.679 * -0.0615-0.327 * 1.0431
=-2.47

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $253 Mil.
Revenue was 2530 + 2512 + 2450 + 2430 = $9,922 Mil.
Gross Profit was 1294 + 2496 + 830 + 1229 = $5,849 Mil.
Total Current Assets was $1,612 Mil.
Total Assets was $40,524 Mil.
Property, Plant and Equipment(Net PPE) was $8,294 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,150 Mil.
Selling, General & Admin. Expense(SGA) was $507 Mil.
Total Current Liabilities was $1,925 Mil.
Long-Term Debt was $37,124 Mil.
Net Income was -188 + -122 + 54 + -122 = $-378 Mil.
Non Operating Income was -8 + 2 + -8 + -127 = $-141 Mil.
Cash Flow from Operations was 424 + 611 + 689 + 531 = $2,255 Mil.
Accounts Receivable was $264 Mil.
Revenue was 2362 + 2360 + 2287 + 2259 = $9,268 Mil.
Gross Profit was 1166 + 2238 + 769 + 1124 = $5,297 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 $307 Mil.
Total Current Liabilities was $8,569 Mil.
Long-Term Debt was $13,981 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)
=(253 / 9922) / (264 / 9268)
=0.02549889 / 0.02848511
=0.8952

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)
=(2496 / 9268) / (1294 / 9922)
=0.57153647 / 0.58949809
=0.9695

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 - (1612 + 8294) / 40524) / (1 - (7502 + 8275) / 24410)
=0.75555227 / 0.35366653
=2.1363

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
=9922 / 9268
=1.0706

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))
=(2111 / (2111 + 8275)) / (2150 / (2150 + 8294))
=0.20325438 / 0.20585982
=0.9873

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)
=(507 / 9922) / (307 / 9268)
=0.05109857 / 0.03312473
=1.5426

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)
=((37124 + 1925) / 40524) / ((13981 + 8569) / 24410)
=0.96360182 / 0.92380172
=1.0431

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
=(-378 - -141 - 2255) / 40524
=-0.0615

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 -2.47 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 1.06690.86981.05810.9141.02121.06320.83820.92021.09050.9141
GMI 1.03281.01170.98860.99021.00551.00271.11661.46690.69040.9863
AQI 1.05521.01180.99540.8790.98570.98150.96591.0061.23581.2124
SGI 1.05571.04761.09051.07951.08951.02051.04161.08681.11691.0709
DEPI 0.94030.98661.00250.99261.13890.9740.97641.01880.93940.9887
SGAI 0.99081.06111.01461.00690.93160.98260.28411.21450.85041.2197
LVGI 1.07281.0771.07441.14310.51211.05641.00171.00561.02071.0382
TATA -0.1108-0.1201-0.1254-0.2026-0.1311-0.1255-0.1362-0.1271-0.1039-0.0634
M-score -2.88-3.15-2.97-3.54-2.81-3.02-3.06-2.86-2.83-2.77

Charter Communications Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.99471.02291.09051.10791.17771.0020.91410.8952
GMI 1.06871.24290.80380.8680.86780.80120.97710.9695
AQI 0.99831.11621.23580.68630.97841.30461.21242.1363
SGI 1.1361.12321.11691.09811.08161.07941.07091.0706
DEPI 0.97480.94520.93940.95030.97210.98030.98870.9873
SGAI 4.45351.66620.53680.4820.50180.64421.72821.5426
LVGI 0.99521.00671.02071.02340.99691.041.03821.0431
TATA -0.1405-0.1155-0.1039-0.1035-0.1375-0.0659-0.0634-0.0615
M-score -3.58-2.84-2.72-2.90-2.88-2.65-2.86-2.47
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