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Computer Sciences Corp (NYSE:CSC)
Beneish M-Score
-2.80 (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 -2.59 suggests that the company is not a manipulator.

CSC' s Beneish M-Score Range Over the Past 10 Years
Min: -4.35   Max: -2.07
Current: -2.8

-4.35
-2.07

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.

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 * 1.3326 + 0.528 * 0.8223 + 0.404 * 1.3483 + 0.892 * 0.7009 + 0.115 * 0.8818 - 0.172 * SGAI + 4.679 * TATA - 0.327 * LVGI - 0.172 * 1.0615 + 4.679 * -0.0264 - 0.327 * 1.1565 = -2.59

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

 This Year (Jun16) TTM: Last Year (Jun15) TTM: Accounts Receivable was \$1,983 Mil. Revenue was 1930 + 1807 + 1750 + 2712 = \$8,199 Mil. Gross Profit was 509 + 347 + 534 + 742 = \$2,132 Mil. Total Current Assets was \$3,404 Mil. Total Assets was \$8,857 Mil. Property, Plant and Equipment(Net PPE) was \$1,012 Mil. Depreciation, Depletion and Amortization(DDA) was \$729 Mil. Selling, General & Admin. Expense(SGA) was \$1,099 Mil. Total Current Liabilities was \$2,763 Mil. Long-Term Debt was \$2,543 Mil. Net Income was -21 + -119 + 43 + 167 = \$70 Mil. Non Operating Income was -59 + -109 + -13 + -43 = \$-224 Mil. Cash Flow from Operations was 50 + 107 + 254 + 117 = \$528 Mil. 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.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of daysÂ’ 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) = (1983 / 8199) / (2123 / 11697) = 0.24185876 / 0.18149953 = 1.3326

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) = (2501 / 11697) / (2132 / 8199) = 0.21381551 / 0.26003171 = 0.8223

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 - (3404 + 1012) / 8857) / (1 - (4796 + 1558) / 10116) = 0.50141131 / 0.37188612 = 1.3483

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 = 8199 / 11697 = 0.7009

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)) = (912 / (912 + 1558)) / (729 / (729 + 1012)) = 0.36923077 / 0.41872487 = 0.8818

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) = (1099 / 8199) / (1477 / 11697) = 0.13404074 / 0.12627169 = 1.0615

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) = ((2543 + 2763) / 8857) / ((1707 + 3533) / 10116) = 0.59907418 / 0.5179913 = 1.1565

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 = (70 - -224 - 528) / 8857 = -0.0264

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 -2.59 suggests that the company will not be a manipulator.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Computer Sciences Corp Annual Data

 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 DSRI 1.0988 0.9597 0.8368 1.0551 0.9714 0.8849 0.529 1.956 0.4737 2.5626 GMI 0.9687 1.0081 0.9762 1.0063 1.063 3.2035 0.2894 0.7939 1.2176 0.8019 AQI 0.9793 1.1813 0.9223 0.989 1.0692 0.9178 0.8733 1.0857 1.1114 1.1716 SGI 1.0165 1.1106 1.0146 0.9634 0.9947 0.9897 0.9443 0.8669 0.9365 0.5838 DEPI 1.0783 0.9887 0.9059 1.0301 1.0854 0.945 0.9708 1.0236 0.8749 0.8917 SGAI 1.0705 0.9584 1.0942 0.9499 0.979 1.1947 1.1091 1.2336 1.2842 1.1591 LVGI 1.1398 1.0731 1.0055 0.9031 0.863 1.3171 0.9656 0.9578 1.0568 1.1162 TATA -0.0958 -0.06 -0.0698 -0.0639 -0.0592 -0.4966 -0.0171 -0.0762 -0.1401 -0.0547 M-score -2.90 -2.64 -3.02 -2.72 -2.67 -3.93 -3.48 -2.17 -3.60 -1.78

Computer Sciences Corp Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 DSRI 1.0636 1.0106 0.9356 0.4739 0.8564 0.9073 0.8524 2.0166 1.3326 1.3703 GMI 0.8425 0.8671 1.0371 1.2156 1.2632 1.3107 0.9967 0.8302 0.8223 0.811 AQI 1.0758 1.1232 1.0499 1.1114 1.1074 1.1543 1.095 1.1716 1.3483 1.2644 SGI 0.8981 0.9338 0.9516 0.9361 0.9011 0.88 0.8046 0.7418 0.7009 0.6495 DEPI 0.9883 0.927 0.9 0.8749 0.9435 1.0133 0.8495 0.8917 0.8818 0.8745 SGAI 1.2339 1.1985 1.2761 1.2828 1.2306 1.1823 0.8924 0.9455 1.0615 1.2018 LVGI 0.9627 1.0091 1.0148 1.0568 1.0554 1.0275 1.1183 1.1162 1.1565 1.1608 TATA -0.0821 -0.0901 -0.1421 -0.1404 -0.1459 -0.1321 -0.071 -0.0509 -0.0264 -0.054 M-score -2.98 -3.02 -3.27 -3.60 -3.26 -3.10 -3.12 -2.07 -2.59 -2.80
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