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Charter Communications Inc (NAS:CHTR)
Beneish M-Score
-2.68 (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 -2.68 suggests that the company is not a manipulator.

CHTR' s 10-Year Beneish M-Score Range
Min: -6.77   Max: 13.66
Current: -2.68

-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 * 1.0229+0.528 * 1.3236+0.404 * 1.1162+0.892 * 1.1232+0.115 * 0.9452
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0512+4.679 * -0.1139-0.327 * 1.0067
=-2.68

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $270 Mil.
Revenue was 2287 + 2259 + 2202 + 2148 = $8,896 Mil.
Gross Profit was 1132 + 1124 + 755 + -152 = $2,859 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 $294 Mil.
Total Current Liabilities was $1,586 Mil.
Long-Term Debt was $17,595 Mil.
Net Income was -53 + -45 + -37 + 39 = $-96 Mil.
Non Operating Income was 5 + -20 + -5 + -14 = $-34 Mil.
Cash Flow from Operations was 520 + 632 + 577 + 595 = $2,324 Mil.
Accounts Receivable was $235 Mil.
Revenue was 2118 + 1972 + 1917 + 1913 = $7,920 Mil.
Gross Profit was 1048 + 977 + 659 + 685 = $3,369 Mil.
Total Current Assets was $357 Mil.
Total Assets was $17,250 Mil.
Property, Plant and Equipment(Net PPE) was $7,838 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,820 Mil.
Selling, General & Admin. Expense(SGA) was $249 Mil.
Total Current Liabilities was $1,382 Mil.
Long-Term Debt was $14,306 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)
=(270 / 8896) / (235 / 7920)
=0.03035072 / 0.02967172
=1.0229

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)
=(1124 / 7920) / (1132 / 8896)
=0.42537879 / 0.3213804
=1.3236

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 - (370 + 8305) / 20950) / (1 - (357 + 7838) / 17250)
=0.58591885 / 0.52492754
=1.1162

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
=8896 / 7920
=1.1232

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))
=(1820 / (1820 + 7838)) / (2068 / (2068 + 8305))
=0.18844481 / 0.19936373
=0.9452

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)
=(294 / 8896) / (249 / 7920)
=0.03304856 / 0.03143939
=1.0512

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)
=((17595 + 1586) / 20950) / ((14306 + 1382) / 17250)
=0.91556086 / 0.90944928
=1.0067

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
=(-96 - -34 - 2324) / 20950
=-0.1139

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 -2.68 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

Dec03Dec04Dec05Dec06Dec07Dec08Dec10Dec11Dec12Dec13
DSRI 0.69141.01781.06520.83321.05810.9141.02121.06320.8382
GMI 1.01571.02381.03341.00940.98860.99021.11120.99581.4596
AQI 1.04240.90341.05521.01180.99540.8790.98570.98150.9659
SGI 1.05540.98781.05741.09361.09051.07951.08951.02051.0416
DEPI 0.9180.89350.94030.98661.00250.99261.13890.9740.9764
SGAI 0.9241.03490.99181.05271.01461.00690.25940.95760
LVGI 1.04031.25421.07281.0771.07441.14310.51211.05641.0017
TATA -0.0639-0.1437-0.1065-0.1082-0.1111-0.2026-0.1322-0.1255-0.1362
M-score -3.00-3.27-2.86-3.08-2.90-3.54-2.64-3.01-2.83

Charter Communications Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.01910.96730.83820.86090.83390.86740.99471.0229
GMI 1.24961.4491.45961.31381.06510.83521.21141.3236
AQI 0.9830.91510.96590.96010.97091.06790.99831.1162
SGI 1.03371.03791.04161.04591.04461.06671.1361.1232
DEPI 0.97250.98590.97640.98580.97940.99790.97480.9452
SGAI -0.7663-1.634100-0.3753-0.34582.15591.0512
LVGI 1.03671.03631.00171.0041.00571.00450.99521.0067
TATA -0.1274-0.1244-0.1362-0.1361-0.1381-0.1274-0.1386-0.1139
M-score -2.61-2.42-2.83-2.89-2.98-2.97-3.10-2.68
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