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Computer Sciences Corp (NYSE:CSC)
Beneish M-Score
-3.26 (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 -3.26 suggests that the company is not a manipulator.

CSC' s 10-Year Beneish M-Score Range
Min: -4.29   Max: -2.16
Current: -3.26

-4.29
-2.16

During the past 13 years, the highest Beneish M-Score of Computer Sciences Corp was -2.16. The lowest was -4.29. And the median was -2.76.


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 * 0.8564+0.528 * 1.2632+0.404 * 1.1074+0.892 * 0.9011+0.115 * 0.9435
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2306+4.679 * -0.1459-0.327 * 1.0554
=-3.26

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $2,123 Mil.
Revenue was 2761 + 2909 + 2947 + 3080 = $11,697 Mil.
Gross Profit was 735 + 476 + 417 + 873 = $2,501 Mil.
Total Current Assets was $4,796 Mil.
Total Assets was $10,116 Mil.
Property, Plant and Equipment(Net PPE) was $1,558 Mil.
Depreciation, Depletion and Amortization(DDA) was $912 Mil.
Selling, General & Admin. Expense(SGA) was $1,477 Mil.
Total Current Liabilities was $3,533 Mil.
Long-Term Debt was $1,707 Mil.
Net Income was 160 + 9 + -314 + 151 = $6 Mil.
Non Operating Income was 8 + 9 + -13 + -6 = $-2 Mil.
Cash Flow from Operations was 324 + 290 + 653 + 217 = $1,484 Mil.
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.



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)
=(2123 / 11697) / (2751 / 12981)
=0.18149953 / 0.21192512
=0.8564

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)
=(476 / 12981) / (735 / 11697)
=0.27008705 / 0.21381551
=1.2632

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 - (4796 + 1558) / 10116) / (1 - (5649 + 1936) / 11420)
=0.37188612 / 0.33581436
=1.1074

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
=11697 / 12981
=0.9011

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))
=(1035 / (1035 + 1936)) / (912 / (912 + 1558))
=0.34836755 / 0.36923077
=0.9435

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)
=(1477 / 11697) / (1332 / 12981)
=0.12627169 / 0.10261151
=1.2306

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)
=((1707 + 3533) / 10116) / ((2194 + 3411) / 11420)
=0.5179913 / 0.4908056
=1.0554

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
=(6 - -2 - 1484) / 10116
=-0.1459

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 -3.26 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

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 1.01861.09880.95970.83681.05510.97140.88490.5291.9560.4737
GMI 0.98490.96871.00810.97621.00631.0633.20350.28940.79391.2176
AQI 0.92040.97931.18130.92230.9891.06920.91780.87331.08571.1114
SGI 1.03961.01651.11061.01460.96340.99470.98970.94430.86690.9365
DEPI 0.96371.07830.98870.90591.03011.08540.9450.97081.02360.8749
SGAI 1.00291.07050.95841.09420.94990.9791.19471.10911.23361.2842
LVGI 1.03961.13981.07311.00550.90310.8631.31710.96560.95781.0568
TATA -0.0709-0.0867-0.0506-0.0558-0.0502-0.0511-0.4842-0.0171-0.0762-0.1401
M-score -2.82-2.85-2.60-2.95-2.65-2.63-3.87-3.48-2.17-3.60

Computer Sciences Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.52350.96811.03561.10441.97571.06361.01060.93560.47390.8564
GMI 0.28730.27780.37610.73850.80120.84250.86711.03711.21561.2632
AQI 0.87330.90520.94471.12511.08571.07581.12321.04991.11141.1074
SGI 0.95430.91480.87880.84260.85830.89810.93380.95160.93610.9011
DEPI 0.97080.97880.97590.97421.02360.98830.9270.90.87490.9435
SGAI 1.1031.1251.19181.31211.24171.23391.19851.27611.28281.2306
LVGI 0.96560.9490.8910.9820.95780.96271.00911.01481.05681.0554
TATA -0.0175-0.00760.0186-0.0258-0.0762-0.0821-0.0901-0.1421-0.1404-0.1459
M-score -3.48-3.05-2.82-2.78-2.16-2.98-3.02-3.27-3.60-3.26
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