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Constant Contact Inc (NAS:CTCT)
Beneish M-Score
-2.16 (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.

Constant Contact Inc has a M-score of -2.16 signals that the company is a manipulator.

CTCT' s 10-Year Beneish M-Score Range
Min: -3.35   Max: 3.49
Current: -2.16

-3.35
3.49

During the past 13 years, the highest Beneish M-Score of Constant Contact Inc was 3.49. The lowest was -3.35. And the median was -2.29.


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 Constant Contact Inc 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 * 1.981+0.528 * 0.9935+0.404 * 0.8368+0.892 * 1.1511+0.115 * 1.0473
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9707+4.679 * -0.1392-0.327 * 1.0127
=-2.16

* 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 $0.4 Mil.
Revenue was 91.531 + 90.417 + 88.054 + 83.494 = $353.5 Mil.
Gross Profit was 67.069 + 65.986 + 64.041 + 60.271 = $257.4 Mil.
Total Current Assets was $193.9 Mil.
Total Assets was $349.3 Mil.
Property, Plant and Equipment(Net PPE) was $48.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.6 Mil.
Selling, General & Admin. Expense(SGA) was $176.3 Mil.
Total Current Liabilities was $64.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 3.826 + 3.55 + 6.248 + 5.198 = $18.8 Mil.
Non Operating Income was 0 + 0 + 0.172 + 0 = $0.2 Mil.
Cash Flow from Operations was 12.592 + 20.221 + 16.107 + 18.347 = $67.3 Mil.
Accounts Receivable was $0.2 Mil.
Revenue was 81.256 + 78.874 + 74.931 + 72.039 = $307.1 Mil.
Gross Profit was 59.156 + 57.147 + 54.279 + 51.561 = $222.1 Mil.
Total Current Assets was $151.1 Mil.
Total Assets was $305.6 Mil.
Property, Plant and Equipment(Net PPE) was $42.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.2 Mil.
Selling, General & Admin. Expense(SGA) was $157.8 Mil.
Total Current Liabilities was $55.8 Mil.
Long-Term Debt was $0.0 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)
=(0.358 / 353.496) / (0.157 / 307.1)
=0.00101274 / 0.00051123
=1.981

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)
=(65.986 / 307.1) / (67.069 / 353.496)
=0.72335721 / 0.72806199
=0.9935

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 - (193.926 + 48.44) / 349.254) / (1 - (151.127 + 42.707) / 305.607)
=0.3060466 / 0.36574097
=0.8368

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
=353.496 / 307.1
=1.1511

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))
=(23.247 / (23.247 + 42.707)) / (24.572 / (24.572 + 48.44))
=0.35247294 / 0.33654742
=1.0473

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)
=(176.262 / 353.496) / (157.753 / 307.1)
=0.49862516 / 0.5136861
=0.9707

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)
=((0 + 64.629) / 349.254) / ((0 + 55.843) / 305.607)
=0.1850487 / 0.18272814
=1.0127

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
=(18.822 - 0.172 - 67.267) / 349.254
=-0.1392

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.

Constant Contact Inc has a M-score of -2.16 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.

Constant Contact Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.46410.82510.37330.89590.6151.07111.34881.72871.2667
GMI 1.03840.96621.02751.020.99950.99311.00690.9920.9842
AQI 0.31810.32870.71822.00526.59953.6062.64820.8720.8233
SGI 1.87971.83271.72831.47891.351.23071.1761.13181.1622
DEPI 0.87090.94990.95220.98560.92380.96560.91380.89681.0151
SGAI 1.28460.84410.92310.96560.95610.9531.01920.97630.9627
LVGI 0.57740.24031.29841.18490.99340.93360.92110.92270.9128
TATA -0.3519-0.077-0.1253-0.164-0.132-0.0812-0.1019-0.1261-0.134
M-score -4.02-2.28-3.18-2.56-0.88-1.51-1.80-2.32-2.76

Constant Contact Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.26470.79170.58371.72871.73381.3730.79931.26671.23681.981
GMI 1.00591.00190.99710.9920.98680.98090.98220.98420.98810.9935
AQI 2.34890.91080.90740.8720.85310.8220.81430.82330.80480.8368
SGI 1.16081.14821.13711.13181.13681.14351.15111.16221.15931.1511
DEPI 0.89670.89920.92310.89680.90630.96951.0021.01511.03251.0473
SGAI 1.0581.05271.01110.97630.9350.9370.95250.96270.97870.9707
LVGI 0.95280.8910.97050.92270.87450.87420.92380.91280.97591.0127
TATA -0.0943-0.1003-0.1212-0.1261-0.1241-0.1275-0.1302-0.134-0.1461-0.1392
M-score -1.99-3.03-3.35-2.32-2.29-2.64-3.19-2.76-2.87-2.16
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