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Computer Sciences Corp (NYSE:CSC)
Beneish M-Score
-3.27 (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 -3.27 suggests that the company is not a manipulator.

CSC' s 10-Year Beneish M-Score Range
Min: -4.29   Max: -2.16
Current: -3.27

-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 * 0.9356+0.528 * 1.0371+0.404 * 1.0499+0.892 * 0.9516+0.115 * 0.9
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2761+4.679 * -0.1421-0.327 * 1.0148
=-3.27

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $2,435 Mil.
Revenue was 2947 + 3080 + 3237 + 3329 = $12,593 Mil.
Gross Profit was 417 + 873 + 873 + 918 = $3,081 Mil.
Total Current Assets was $5,186 Mil.
Total Assets was $10,653 Mil.
Property, Plant and Equipment(Net PPE) was $1,692 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,027 Mil.
Selling, General & Admin. Expense(SGA) was $1,564 Mil.
Total Current Liabilities was $3,190 Mil.
Long-Term Debt was $2,170 Mil.
Net Income was -314 + 151 + 146 + 174 = $157 Mil.
Non Operating Income was -13 + -6 + 1 + -2 = $-20 Mil.
Cash Flow from Operations was 653 + 217 + 273 + 548 = $1,691 Mil.
Accounts Receivable was $2,735 Mil.
Revenue was 3228 + 3187 + 3260 + 3559 = $13,234 Mil.
Gross Profit was 866 + 849 + 794 + 849 = $3,358 Mil.
Total Current Assets was $5,408 Mil.
Total Assets was $11,226 Mil.
Property, Plant and Equipment(Net PPE) was $2,029 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,045 Mil.
Selling, General & Admin. Expense(SGA) was $1,288 Mil.
Total Current Liabilities was $3,382 Mil.
Long-Term Debt was $2,184 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)
=(2435 / 12593) / (2735 / 13234)
=0.19336139 / 0.20666465
=0.9356

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)
=(873 / 13234) / (417 / 12593)
=0.25374037 / 0.24465973
=1.0371

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 - (5186 + 1692) / 10653) / (1 - (5408 + 2029) / 11226)
=0.35436027 / 0.33752004
=1.0499

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
=12593 / 13234
=0.9516

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))
=(1045 / (1045 + 2029)) / (1027 / (1027 + 1692))
=0.33994795 / 0.37771239
=0.9

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)
=(1564 / 12593) / (1288 / 13234)
=0.12419598 / 0.09732507
=1.2761

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)
=((2170 + 3190) / 10653) / ((2184 + 3382) / 11226)
=0.50314465 / 0.49581329
=1.0148

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
=(157 - -20 - 1691) / 10653
=-0.1421

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 -3.27 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.8040.90160.52350.96811.03561.10441.97571.06361.01060.9356
GMI 1.87460.39420.28730.27780.37610.73850.80120.84250.86711.0371
AQI 1.0670.84140.87330.90520.94471.12511.08571.07581.12321.0499
SGI 0.9730.9890.95430.91480.87880.84260.85830.89810.93380.9516
DEPI 0.95950.99620.97080.97880.97590.97421.02360.98830.9270.9
SGAI 1.14281.09371.1031.1251.19181.31211.24171.23391.19851.2761
LVGI 1.11940.95590.96560.9490.8910.9820.95780.96271.00911.0148
TATA -0.2792-0.0939-0.0175-0.00760.0186-0.0258-0.0762-0.0821-0.0901-0.1421
M-score -3.57-3.41-3.48-3.05-2.82-2.78-2.16-2.98-3.02-3.27
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