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Computer Sciences Corp (NYSE:CSC)
Beneish M-Score
-2.98 (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.

Computer Sciences Corp has a M-score of -2.98 suggests that the company is not a manipulator.

CSC' s 10-Year Beneish M-Score Range
Min: -4.26   Max: -2.16
Current: -2.98

-4.26
-2.16

During the past 13 years, the highest Beneish M-Score of Computer Sciences Corp was -2.16. The lowest was -4.26. And the median was -2.75.


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 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 * 1.0636+0.528 * 0.8425+0.404 * 1.0758+0.892 * 0.8981+0.115 * 0.9883
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2339+4.679 * -0.0821-0.327 * 0.9627
=-2.98

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,751 Mil.
Revenue was 3237 + 3329 + 3228 + 3187 = $12,981 Mil.
Gross Profit was 873 + 918 + 866 + 849 = $3,506 Mil.
Total Current Assets was $5,649 Mil.
Total Assets was $11,420 Mil.
Property, Plant and Equipment(Net PPE) was $1,936 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,035 Mil.
Selling, General & Admin. Expense(SGA) was $1,332 Mil.
Total Current Liabilities was $3,411 Mil.
Long-Term Debt was $2,194 Mil.
Net Income was 146 + 174 + 141 + 203 = $664 Mil.
Non Operating Income was 1 + -2 + 5 + -22 = $-18 Mil.
Cash Flow from Operations was 273 + 548 + 529 + 270 = $1,620 Mil.
Accounts Receivable was $2,880 Mil.
Revenue was 3260 + 3559 + 3781 + 3854 = $14,454 Mil.
Gross Profit was 794 + 849 + 786 + 860 = $3,289 Mil.
Total Current Assets was $5,360 Mil.
Total Assets was $10,866 Mil.
Property, Plant and Equipment(Net PPE) was $2,114 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,110 Mil.
Selling, General & Admin. Expense(SGA) was $1,202 Mil.
Total Current Liabilities was $3,079 Mil.
Long-Term Debt was $2,461 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)
=(2751 / 12981) / (2880 / 14454)
=0.21192512 / 0.1992528
=1.0636

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)
=(918 / 14454) / (873 / 12981)
=0.22754947 / 0.27008705
=0.8425

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 - (5649 + 1936) / 11420) / (1 - (5360 + 2114) / 10866)
=0.33581436 / 0.31216639
=1.0758

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
=12981 / 14454
=0.8981

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))
=(1110 / (1110 + 2114)) / (1035 / (1035 + 1936))
=0.3442928 / 0.34836755
=0.9883

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)
=(1332 / 12981) / (1202 / 14454)
=0.10261151 / 0.08316037
=1.2339

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)
=((2194 + 3411) / 11420) / ((2461 + 3079) / 10866)
=0.4908056 / 0.50984723
=0.9627

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
=(664 - -18 - 1620) / 11420
=-0.0821

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 -2.98 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.

Computer Sciences Corp Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
DSRI 1.02761.01861.09880.95970.83681.05510.97140.88490.5291.956
GMI 0.9580.98490.96871.00810.97621.00631.0633.20350.28940.7939
AQI 0.8990.92040.97931.18130.92230.9891.06920.91780.87331.0857
SGI 0.9521.03961.01651.11061.01460.96340.99470.98970.94430.8669
DEPI 0.98920.96371.07830.98870.90591.03011.08540.9450.97081.0236
SGAI 0.99791.00291.07050.95841.09420.94990.9791.19471.10911.2336
LVGI 0.87071.03961.13981.07311.00550.90310.8631.31710.96560.9578
TATA -0.0895-0.0709-0.0867-0.0506-0.0558-0.0502-0.0511-0.4842-0.0171-0.0762
M-score -2.94-2.82-2.85-2.60-2.95-2.65-2.63-3.87-3.48-2.17

Computer Sciences Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.88490.81940.8040.90160.52350.96811.03561.10441.97571.0636
GMI 3.20352.98041.87460.39420.28730.27780.37610.73850.80120.8425
AQI 0.91780.92341.0670.84140.87330.90520.94471.12511.08571.0758
SGI 0.98970.97940.9730.9890.95430.91480.87880.84260.85830.8981
DEPI 1.22581.20831.23360.99620.97080.97880.97590.97421.02360.9883
SGAI 1.19471.21071.14281.09371.1031.1251.19181.31211.24171.2339
LVGI 1.31711.32711.11940.95590.96560.9490.8910.9820.95780.9627
TATA -0.4847-0.5334-0.2798-0.0934-0.0171-0.00640.0186-0.0258-0.0762-0.0821
M-score -3.84-4.26-3.54-3.40-3.48-3.04-2.82-2.78-2.16-2.98
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