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Charter Communications Inc (NAS:CHTR)
Beneish M-Score
0.32 (As of Today)

Warning Sign:

Beneish M-Score 0.32 higher than -2.22, which implies that it might have manipulated its financial results.

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 0.32 signals that the company is a manipulator.

CHTR' s Beneish M-Score Range Over the Past 10 Years
Min: -6.83   Max: 12.08
Current: 0.32

-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 -3.03.


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 * 2.886+0.528 * 1.0676+0.404 * 1.5288+0.892 * 1.4464+0.115 * 2.4277
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.3905+4.679 * -0.0022-0.327 * 0.5152
=0.32

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $1,340 Mil.
Revenue was 6161 + 2530 + 2512 + 2450 = $13,653 Mil.
Gross Profit was 2157 + 1294 + 2496 + 830 = $6,777 Mil.
Total Current Assets was $2,325 Mil.
Total Assets was $149,195 Mil.
Property, Plant and Equipment(Net PPE) was $33,358 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,058 Mil.
Selling, General & Admin. Expense(SGA) was $183 Mil.
Total Current Liabilities was $8,807 Mil.
Long-Term Debt was $60,132 Mil.
Net Income was 3067 + -188 + -122 + 54 = $2,811 Mil.
Non Operating Income was -162 + -8 + 2 + -8 = $-176 Mil.
Cash Flow from Operations was 1590 + 424 + 611 + 689 = $3,314 Mil.
Accounts Receivable was $321 Mil.
Revenue was 2430 + 2362 + 2360 + 2287 = $9,439 Mil.
Gross Profit was 829 + 1166 + 2238 + 769 = $5,002 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 $324 Mil.
Total Current Liabilities was $1,636 Mil.
Long-Term Debt was $13,896 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)
=(1340 / 13653) / (321 / 9439)
=0.09814693 / 0.03400784
=2.886

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)
=(5002 / 9439) / (6777 / 13653)
=0.52992902 / 0.49637442
=1.0676

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 - (2325 + 33358) / 149195) / (1 - (456 + 8244) / 17319)
=0.76082979 / 0.49766153
=1.5288

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
=13653 / 9439
=1.4464

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 + 8244)) / (3058 / (3058 + 33358))
=0.20386287 / 0.08397408
=2.4277

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)
=(183 / 13653) / (324 / 9439)
=0.01340365 / 0.03432567
=0.3905

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)
=((60132 + 8807) / 149195) / ((13896 + 1636) / 17319)
=0.46207313 / 0.89681852
=0.5152

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
=(2811 - -176 - 3314) / 149195
=-0.0022

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 0.32 signals that the company is likely to 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 1.03341.00940.98860.99021.11121.39740.7311.01320.99220.9854
AQI 1.05521.01180.99540.8790.98570.98150.96591.0061.23581.2124
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 0.99181.05271.01461.00690.25943.52850.29021.18921.00311.034
LVGI 1.07281.0771.07441.14310.51211.05641.00171.00561.02071.0382
TATA -0.1108-0.1201-0.1254-0.2026-0.1322-0.1255-0.1363-0.1281-0.1039-0.0634
M-score -2.88-3.14-2.97-3.54-2.64-3.24-3.27-3.10-2.70-2.73

Charter Communications Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.99471.02291.09051.10791.17771.0020.91410.89522.886
GMI 1.06871.24290.80380.8680.93710.86451.05061.04071.0676
AQI 0.99831.11621.23580.68630.97841.30461.21242.13631.5288
SGI 1.1361.12321.11691.09811.08161.07941.07091.07061.4464
DEPI 0.97480.94520.93940.95030.97210.98030.98870.98732.4277
SGAI 4.45351.66620.53680.4820.50180.64421.12891.01930.3905
LVGI 0.99521.00671.02071.02340.99691.041.03821.04310.5152
TATA -0.1405-0.1155-0.1039-0.1035-0.1375-0.0659-0.0634-0.0615-0.0022
M-score -3.58-2.84-2.72-2.90-2.85-2.62-2.72-2.340.32
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