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Cincinnati Financial Corp (NAS:CINF)
Beneish M-Score
0.00 (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.

Cincinnati Financial Corp has a M-score of signals that the company is a manipulator.

During the past 13 years, the highest Beneish M-Score of Cincinnati Financial Corp was 39.24. The lowest was -21.96. And the median was -2.39.


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 Cincinnati Financial Corp 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

* 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 $1,528 Mil.
Revenue was 1364 + 1263 + 1278 + 1316 = $5,221 Mil.
Gross Profit was 1364 + 1263 + 1278 + 1316 = $5,221 Mil.
Total Current Assets was $0 Mil.
Total Assets was $19,447 Mil.
Property, Plant and Equipment(Net PPE) was $188 Mil.
Depreciation, Depletion and Amortization(DDA) was $50 Mil.
Selling, General & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $860 Mil.
Net Income was 188 + 156 + 174 + 176 = $694 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 257 + 309 + 285 + 255 = $1,106 Mil.
Accounts Receivable was $1,503 Mil.
Revenue was 1285 + 1262 + 1280 + 1214 = $5,041 Mil.
Gross Profit was 1285 + 1262 + 1280 + 1214 = $5,041 Mil.
Total Current Assets was $0 Mil.
Total Assets was $18,897 Mil.
Property, Plant and Equipment(Net PPE) was $189 Mil.
Depreciation, Depletion and Amortization(DDA) was $52 Mil.
Selling, General & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $0 Mil.
Long-Term Debt was $825 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)
=(1528 / 5221) / (1503 / 5041)
=0.29266424 / 0.29815513
=

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)
=(1263 / 5041) / (1364 / 5221)
=1 / 1
=

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 - (0 + 188) / 19447) / (1 - (0 + 189) / 18897)
=0.9903327 / 0.98999841
=

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
=5221 / 5041
=

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))
=(52 / (52 + 189)) / (50 / (50 + 188))
=0.21576763 / 0.21008403
=

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)
=(0 / 5221) / (0 / 5041)
=0 / 0
=

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)
=((860 + 0) / 19447) / ((825 + 0) / 18897)
=0.04422276 / 0.04365772
=

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
=(694 - 0 - 1106) / 19447
=-0.0212

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.

Cincinnati Financial Corp has a M-score of 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.

Cincinnati Financial Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.83811.03631.04970.92771.0521
GMI 11111
AQI 0.99930.99680.99671.00031.0023
SGI 1.20790.9360.89791.02070.9664
DEPI 0.9981.25661.09640.90810.8659
SGAI 0.87691.07051.11490.01990
LVGI 0.92921.03521.24440.92470.9566
TATA 0.01830.009-0.0041-0.0064-0.0102
M-score -2.31-2.46-2.63-2.38-2.34

Cincinnati Financial Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.00730.99080.98430.94450.94770.9308
GMI 111111
AQI 1.00121.00121.00151.00151.00161.0016
SGI 1.10221.0921.09621.09621.09141.0918
DEPI 0.87660.78680.77260.73270.92380.9589
SGAI 1.02070.4070000
LVGI 0.9460.9530.98150.99050.93280.9392
TATA -0.0158-0.0231-0.0255-0.0222-0.0186-0.021
M-score -2.46-2.42-2.38-2.40-2.35-2.37
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