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Computer Sciences Corporation (NYSE:CSC)
Beneish M-Score
-2.78 (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 Corporation has a M-score of -2.78 suggests that the company is not a manipulator.

CSC' s 10-Year Beneish M-Score Range
Min: -4.3   Max: -2.28
Current: -2.78

-4.3
-2.28

During the past 13 years, the highest Beneish M-Score of Computer Sciences Corporation was -2.28. The lowest was -4.30. 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 Corporation 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 * 1.1044+0.528 * 0.7385+0.404 * 1.1251+0.892 * 0.8426+0.115 * 0.9742
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3121+4.679 * -0.0258-0.327 * 0.982
=-2.78

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
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.
Net Income was 141 + 203 + 156 + 281 = $781 Mil.
Non Operating Income was 5 + -22 + 1 + 34 = $18 Mil.
Cash Flow from Operations was 529 + 270 + 213 + 41 = $1,053 Mil.
Accounts Receivable was $2,939 Mil.
Revenue was 3781 + 3854 + 3957 + 4114 = $15,706 Mil.
Gross Profit was 786 + 860 + 704 + 593 = $2,943 Mil.
Total Current Assets was $5,618 Mil.
Total Assets was $11,260 Mil.
Property, Plant and Equipment(Net PPE) was $2,264 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,121 Mil.
Selling, General & Admin. Expense(SGA) was $1,165 Mil.
Total Current Liabilities was $3,287 Mil.
Long-Term Debt was $2,398 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)
=(2735 / 13234) / (2939 / 15706)
=0.20666465 / 0.18712594
=1.1044

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)
=(849 / 15706) / (866 / 13234)
=0.18738062 / 0.25374037
=0.7385

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 - (5408 + 2029) / 11226) / (1 - (5618 + 2264) / 11260)
=0.33752004 / 0.3
=1.1251

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
=13234 / 15706
=0.8426

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))
=(1121 / (1121 + 2264)) / (1045 / (1045 + 2029))
=0.33116691 / 0.33994795
=0.9742

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)
=(1288 / 13234) / (1165 / 15706)
=0.09732507 / 0.07417547
=1.3121

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)
=((2184 + 3382) / 11226) / ((2398 + 3287) / 11260)
=0.49581329 / 0.50488455
=0.982

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
=(781 - 18 - 1053) / 11226
=-0.0258

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 Corporation has a M-score of -2.78 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 Corporation Annual Data

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
DSRI 0.83691.02761.01861.09880.95970.83681.05510.97140.88491.0401
GMI 1.0740.9580.98490.96871.00810.97621.00631.0633.20350.2894
AQI 0.96520.8990.92040.97931.18130.92230.9891.06920.91780.8733
SGI 1.30150.9521.03961.01651.11061.01460.96340.99470.98970.9443
DEPI 0.93390.98920.96371.07830.98870.90591.03011.08540.9450.9708
SGAI 0.91130.99791.00291.07050.95841.09420.94990.9791.19471.1091
LVGI 0.94640.87071.03961.13981.07311.00550.90310.8631.31710.9656
TATA -0.0981-0.0895-0.0709-0.0867-0.0506-0.0558-0.0502-0.0511-0.4842-0.0171
M-score -2.77-2.94-2.82-2.85-2.60-2.95-2.65-2.63-3.87-3.01

Computer Sciences Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.00120.88180.88490.81940.8040.90161.02930.96811.03561.1044
GMI 1.22262.70493.20352.98041.87460.39420.28730.27780.37610.7385
AQI 0.88240.94780.91780.92341.0670.84140.87330.90520.94471.1251
SGI 1.00110.98260.98970.97940.9730.9890.95430.91480.87880.8426
DEPI 1.02880.98330.9450.93440.95950.99620.97080.97880.97590.9742
SGAI 1.05541.10381.19471.21071.14281.09371.1031.1251.19181.3121
LVGI 1.0631.27351.31711.32711.11940.95590.96560.9490.8910.982
TATA -0.2603-0.4828-0.4847-0.5334-0.2798-0.0934-0.0171-0.00640.0186-0.0258
M-score -3.65-4.09-3.88-4.30-3.57-3.40-3.01-3.04-2.82-2.78
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