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Charter Communications Inc (NAS:CHTR)
Beneish M-Score
-2.82 (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 -2.82 suggests that the company is not a manipulator.

CHTR' s 10-Year Beneish M-Score Range
Min: -3.54   Max: -2.19
Current: -2.82

-3.54
-2.19

During the past 13 years, the highest Beneish M-Score of Charter Communications Inc was -2.19. The lowest was -3.54. And the median was -2.90.


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 * 1.0905+0.528 * 0.7451+0.404 * 1.2383+0.892 * 1.1169+0.115 * 0.9394
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9664+4.679 * -0.1026-0.327 * 1.0201
=-2.82

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $285 Mil.
Revenue was 2360 + 2287 + 2259 + 2202 = $9,108 Mil.
Gross Profit was 1201 + 1132 + 1124 + 755 = $4,212 Mil.
Total Current Assets was $371 Mil.
Total Assets was $24,550 Mil.
Property, Plant and Equipment(Net PPE) was $8,373 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,102 Mil.
Selling, General & Admin. Expense(SGA) was $408 Mil.
Total Current Liabilities was $1,635 Mil.
Long-Term Debt was $21,023 Mil.
Net Income was -48 + -53 + -45 + -37 = $-183 Mil.
Non Operating Income was -4 + 5 + -20 + -5 = $-24 Mil.
Cash Flow from Operations was 630 + 520 + 632 + 577 = $2,359 Mil.
Accounts Receivable was $234 Mil.
Revenue was 2148 + 2118 + 1972 + 1917 = $8,155 Mil.
Gross Profit was 753 + 721 + 677 + 659 = $2,810 Mil.
Total Current Assets was $322 Mil.
Total Assets was $17,295 Mil.
Property, Plant and Equipment(Net PPE) was $7,981 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,854 Mil.
Selling, General & Admin. Expense(SGA) was $378 Mil.
Total Current Liabilities was $1,467 Mil.
Long-Term Debt was $14,181 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)
=(285 / 9108) / (234 / 8155)
=0.03129117 / 0.02869405
=1.0905

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)
=(1132 / 8155) / (1201 / 9108)
=0.34457388 / 0.46245059
=0.7451

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 - (371 + 8373) / 24550) / (1 - (322 + 7981) / 17295)
=0.64382892 / 0.51991905
=1.2383

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
=9108 / 8155
=1.1169

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))
=(1854 / (1854 + 7981)) / (2102 / (2102 + 8373))
=0.18851042 / 0.20066826
=0.9394

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)
=(408 / 9108) / (378 / 8155)
=0.04479578 / 0.04635193
=0.9664

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)
=((21023 + 1635) / 24550) / ((14181 + 1467) / 17295)
=0.92293279 / 0.90477016
=1.0201

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
=(-183 - -24 - 2359) / 24550
=-0.1026

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 -2.82 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.96730.82590.86090.83390.86740.92020.93870.99471.02291.0905
GMI 1.02151.11661.23991.40611.59421.46691.31531.03780.82420.7451
AQI 0.91510.9670.96010.97091.06791.00621.00670.99831.11621.2383
SGI 1.03791.04161.04591.04461.06671.08681.11141.1361.12321.1169
DEPI 0.98590.97640.98580.97940.99791.01880.99640.97480.94520.9394
SGAI 1.01020.28410.0329-0.1323-0.28760.82427.0182-1.7476-0.80090.9664
LVGI 1.03631.0021.0041.00571.00451.00581.00070.99521.00671.0201
TATA -0.1244-0.1362-0.1361-0.1381-0.1268-0.1271-0.1313-0.1388-0.1146-0.1026
M-score -3.10-3.07-2.93-2.85-2.57-2.79-3.92-2.52-2.63-2.82
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