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Computer Sciences Corp (NYSE:CSC)
Beneish M-Score
-2.07 (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 -2.07 signals that the company is a manipulator.

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

-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 * 2.0166+0.528 * 0.8302+0.404 * 1.1716+0.892 * 0.7418+0.115 * 0.8917
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9455+4.679 * -0.0509-0.327 * 1.1162
=-2.07

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $1,831 Mil.
Revenue was 1807 + 1750 + 2712 + 2761 = $9,030 Mil.
Gross Profit was 347 + 534 + 742 + 735 = $2,358 Mil.
Total Current Assets was $3,412 Mil.
Total Assets was $7,736 Mil.
Property, Plant and Equipment(Net PPE) was $1,025 Mil.
Depreciation, Depletion and Amortization(DDA) was $767 Mil.
Selling, General & Admin. Expense(SGA) was $1,078 Mil.
Total Current Liabilities was $2,608 Mil.
Long-Term Debt was $1,934 Mil.
Net Income was -119 + 43 + 167 + 160 = $251 Mil.
Non Operating Income was -109 + -13 + -43 + 8 = $-157 Mil.
Cash Flow from Operations was 107 + 254 + 117 + 324 = $802 Mil.
Accounts Receivable was $1,224 Mil.
Revenue was 2909 + 2947 + 3080 + 3237 = $12,173 Mil.
Gross Profit was 476 + 417 + 873 + 873 = $2,639 Mil.
Total Current Assets was $4,905 Mil.
Total Assets was $10,201 Mil.
Property, Plant and Equipment(Net PPE) was $1,583 Mil.
Depreciation, Depletion and Amortization(DDA) was $977 Mil.
Selling, General & Admin. Expense(SGA) was $1,537 Mil.
Total Current Liabilities was $3,601 Mil.
Long-Term Debt was $1,765 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)
=(1831 / 9030) / (1224 / 12173)
=0.20276855 / 0.1005504
=2.0166

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)
=(2639 / 12173) / (2358 / 9030)
=0.21679126 / 0.26112957
=0.8302

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 - (3412 + 1025) / 7736) / (1 - (4905 + 1583) / 10201)
=0.42644778 / 0.36398392
=1.1716

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
=9030 / 12173
=0.7418

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))
=(977 / (977 + 1583)) / (767 / (767 + 1025))
=0.38164063 / 0.42801339
=0.8917

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)
=(1078 / 9030) / (1537 / 12173)
=0.11937984 / 0.12626304
=0.9455

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)
=((1934 + 2608) / 7736) / ((1765 + 3601) / 10201)
=0.58712513 / 0.52602686
=1.1162

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
=(251 - -157 - 802) / 7736
=-0.0509

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 -2.07 signals that the company is likely to 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

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 1.09880.95970.83681.05510.97140.88490.5291.9560.47372.5626
GMI 0.96871.00810.97621.00631.0633.20350.28940.79391.21760.8019
AQI 0.97931.18130.92230.9891.06920.91780.87331.08571.11141.1716
SGI 1.01651.11061.01460.96340.99470.98970.94430.86690.93650.5838
DEPI 1.07830.98870.90591.03011.08540.9450.97081.02360.87490.8917
SGAI 1.07050.95841.09420.94990.9791.19471.10911.23361.28421.1591
LVGI 1.13981.07311.00550.90310.8631.31710.96560.95781.05681.1162
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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.97571.06361.01060.93560.47390.85640.90730.85242.01661.3326
GMI 0.80120.84250.86711.03711.21561.26321.31070.99670.83020.8223
AQI 1.08571.07581.12321.04991.11141.10741.15431.0951.17161.3483
SGI 0.85830.89810.93380.95160.93610.90110.880.80460.74180.7009
DEPI 1.02360.98830.9270.90.87490.94351.01330.84950.89170.8818
SGAI 1.24171.23391.19851.27611.28281.23061.18230.89240.94551.0615
LVGI 0.95780.96271.00911.01481.05681.05541.02751.11831.11621.1565
TATA -0.0762-0.0821-0.0901-0.1421-0.1404-0.1459-0.1321-0.071-0.0509-0.0264
M-score -2.16-2.98-3.02-3.27-3.60-3.26-3.10-3.12-2.07-2.59
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