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Charter Communications Inc (NAS:CHTR)
Beneish M-Score
-0.34 (As of Today)

Warning Sign:

Beneish M-Score -0.34 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 -0.34 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: -0.34

-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 -3.02.


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 * 1.9229+0.528 * 1.1665+0.404 * 0.9949+0.892 * 2.212+0.115 * 1.5524
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1908+4.679 * -0.016-0.327 * 0.4838
=-0.34

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,242 Mil.
Revenue was 10037 + 6161 + 2530 + 2512 = $21,240 Mil.
Gross Profit was 5300 + 3225 + 1294 + 1307 = $11,126 Mil.
Total Current Assets was $2,781 Mil.
Total Assets was $148,897 Mil.
Property, Plant and Equipment(Net PPE) was $32,881 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,957 Mil.
Selling, General & Admin. Expense(SGA) was $1,375 Mil.
Total Current Liabilities was $8,647 Mil.
Long-Term Debt was $59,946 Mil.
Net Income was 189 + 3067 + -188 + -122 = $2,946 Mil.
Non Operating Income was 66 + -162 + -8 + 2 = $-102 Mil.
Cash Flow from Operations was 2801 + 1590 + 424 + 611 = $5,426 Mil.
Accounts Receivable was $292 Mil.
Revenue was 2450 + 2430 + 2362 + 2360 = $9,602 Mil.
Gross Profit was 1237 + 1226 + 1166 + 2238 = $5,867 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 $522 Mil.
Total Current Liabilities was $1,829 Mil.
Long-Term Debt was $33,281 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)
=(1242 / 21240) / (292 / 9602)
=0.05847458 / 0.03041033
=1.9229

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)
=(5867 / 9602) / (11126 / 21240)
=0.61101854 / 0.52382298
=1.1665

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 - (2781 + 32881) / 148897) / (1 - (406 + 8281) / 36873)
=0.76049215 / 0.76440756
=0.9949

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
=21240 / 9602
=2.212

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))
=(2114 / (2114 + 8281)) / (4957 / (4957 + 32881))
=0.203367 / 0.13100587
=1.5524

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)
=(1375 / 21240) / (522 / 9602)
=0.06473635 / 0.05436367
=1.1908

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)
=((59946 + 8647) / 148897) / ((33281 + 1829) / 36873)
=0.46067416 / 0.95218724
=0.4838

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
=(2946 - -102 - 5426) / 148897
=-0.016

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 -0.34 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 local exchange's 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

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.99471.02291.09051.10791.17771.0020.91410.89522.8861.9229
GMI 1.06871.24290.80380.8680.86820.7461.13251.11981.10571.1665
AQI 0.99831.11621.23580.68630.97841.30461.21242.13631.52880.9949
SGI 1.1361.12321.11691.09811.08161.07941.07091.07061.44642.212
DEPI 0.97480.94520.93940.95030.97210.98030.98870.98732.42771.5524
SGAI 4.45351.66620.53680.4820.53741.03782.40062.12981.84691.1908
LVGI 0.99521.00671.02071.02340.99691.041.03821.04310.51520.4838
TATA -0.1405-0.1155-0.1039-0.1035-0.1375-0.0659-0.0634-0.0615-0.0022-0.016
M-score -3.58-2.84-2.72-2.90-2.89-2.75-2.89-2.490.09-0.34
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