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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.
During the past 13 years, the highest Beneish M-Score of Computer Sciences Corp was -2.07. The lowest was -4.35. And the median was -2.80.
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 Computer Sciences 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 * 2.0166||+||0.528 * 0.8302||+||0.404 * 1.1716||+||0.892 * 0.7418||+||0.115 * 0.8917|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9455||+||4.679 * -0.0509||-||0.327 * 1.1162|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $1,831 Mil.|
Revenue was 1807 + 1750 + 2712 + 2761 = $9,030 Mil.
Gross Profit was 347 + 534 + 742 + 735 = $2,358 Mil.
Total Current Assets was $3,412 Mil.
Total Assets was $7,736 Mil.
Property, Plant and Equipment(Net PPE) was $1,025 Mil.
Depreciation, Depletion and Amortization(DDA) was $767 Mil.
Selling, General & Admin. Expense(SGA) was $1,078 Mil.
Total Current Liabilities was $2,608 Mil.
Long-Term Debt was $1,934 Mil.
Net Income was -119 + 43 + 167 + 160 = $251 Mil.
Non Operating Income was -109 + -13 + -43 + 8 = $-157 Mil.
Cash Flow from Operations was 107 + 254 + 117 + 324 = $802 Mil.
|Accounts Receivable was $1,224 Mil.
Revenue was 2909 + 2947 + 3080 + 3237 = $12,173 Mil.
Gross Profit was 476 + 417 + 873 + 873 = $2,639 Mil.
Total Current Assets was $4,905 Mil.
Total Assets was $10,201 Mil.
Property, Plant and Equipment(Net PPE) was $1,583 Mil.
Depreciation, Depletion and Amortization(DDA) was $977 Mil.
Selling, General & Admin. Expense(SGA) was $1,537 Mil.
Total Current Liabilities was $3,601 Mil.
Long-Term Debt was $1,765 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1831 / 9030)||/||(1224 / 12173)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(2639 / 12173)||/||(2358 / 9030)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (3412 + 1025) / 7736)||/||(1 - (4905 + 1583) / 10201)|
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.
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))|
|=||(977 / (977 + 1583))||/||(767 / (767 + 1025))|
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)|
|=||(1078 / 9030)||/||(1537 / 12173)|
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)|
|=||((1934 + 2608) / 7736)||/||((1765 + 3601) / 10201)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(251 - -157||-||802)||/||7736|
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.
Computer Sciences Corp has a M-score of -2.07 signals that the company is likely to be a manipulator.
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
Computer Sciences Corp Annual Data
Computer Sciences Corp Quarterly Data