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GuruFocus has detected 2 Warning Signs with Cambrex Corp $CBM.
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Cambrex Corp (NYSE:CBM)
Beneish M-Score
-1.85 (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.

Cambrex Corp has a M-score of -1.85 signals that the company is a manipulator.

CBM' s Beneish M-Score Range Over the Past 10 Years
Min: -4.74   Max: 0.82
Current: -1.85

-4.74
0.82

During the past 13 years, the highest Beneish M-Score of Cambrex Corp was 0.82. The lowest was -4.74. And the median was -2.71.


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 Cambrex 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 * 1.3059+0.528 * 0.9789+0.404 * 1.0829+0.892 * 1.1118+0.115 * 0.941
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9608+4.679 * 0.0287-0.327 * 0.7047
=-1.85

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $68.7 Mil.
Revenue was 105.006 + 177.866 + 99.399 + 118.638 = $500.9 Mil.
Gross Profit was 46.825 + 79.167 + 37.602 + 48.557 = $212.2 Mil.
Total Current Assets was $332.8 Mil.
Total Assets was $627.5 Mil.
Property, Plant and Equipment(Net PPE) was $223.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.3 Mil.
Selling, General & Admin. Expense(SGA) was $62.1 Mil.
Total Current Liabilities was $84.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 19.865 + 37.384 + 9.218 + 20.494 = $87.0 Mil.
Non Operating Income was 0.012 + 0.046 + 0.071 + -0.272 = $-0.1 Mil.
Cash Flow from Operations was 35.985 + 11.443 + 47.214 + -25.554 = $69.1 Mil.
Accounts Receivable was $47.3 Mil.
Revenue was 94.741 + 156.187 + 92.979 + 106.635 = $450.5 Mil.
Gross Profit was 38.899 + 66.261 + 35.68 + 45.945 = $186.8 Mil.
Total Current Assets was $283.8 Mil.
Total Assets was $544.2 Mil.
Property, Plant and Equipment(Net PPE) was $203.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.3 Mil.
Selling, General & Admin. Expense(SGA) was $58.2 Mil.
Total Current Liabilities was $104.5 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)
=(68.698 / 500.909) / (47.316 / 450.542)
=0.13714667 / 0.10502018
=1.3059

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)
=(186.785 / 450.542) / (212.151 / 500.909)
=0.41457844 / 0.42353202
=0.9789

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 - (332.804 + 223.767) / 627.478) / (1 - (283.795 + 203.616) / 544.202)
=0.11300317 / 0.10435647
=1.0829

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
=500.909 / 450.542
=1.1118

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))
=(22.342 / (22.342 + 203.616)) / (26.272 / (26.272 + 223.767))
=0.09887678 / 0.10507161
=0.941

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)
=(62.131 / 500.909) / (58.161 / 450.542)
=0.1240365 / 0.12909118
=0.9608

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 + 84.938) / 627.478) / ((0 + 104.528) / 544.202)
=0.13536411 / 0.19207574
=0.7047

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
=(86.961 - -0.143 - 69.088) / 627.478
=0.0287

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.

Cambrex Corp has a M-score of -1.85 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 local exchange's currency.

Cambrex Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.08670.82590.92761.25920.83071.09131.43730.9191.01911.0746
GMI 0.98731.17341.02771.01721.01650.88551.01190.97870.80920.9811
AQI 0.28961.03470.98321.61391.03311.20040.78191.11880.57960.9969
SGI 1.07420.9870.94110.96781.12631.08151.15071.17741.15671.1323
DEPI 1.69440.92891.02180.89110.89171.13251.08530.9091.20191.0369
SGAI 1.27770.53750.89420.98671.02141.06650.91360.93720.95310.9222
LVGI 1.20671.04560.90480.95970.95460.82851.01480.84570.78780.6076
TATA 0.56440.0108-0.0437-0.0363-0.07540.0697-0.0111-0.0063-0.049-0.0677
M-score -0.02-2.44-2.74-2.18-2.86-1.92-2.06-2.34-2.72-2.48

Cambrex Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.9190.79760.58540.72891.01910.97751.23470.84831.07461.3059
GMI 0.97870.86720.83850.83970.80920.85170.92070.94140.98110.9789
AQI 1.11880.88540.86990.82630.57960.56460.57910.62810.99691.0829
SGI 1.17741.24771.1461.16691.15671.16711.17171.15381.13231.1118
DEPI 0.9090.93721.04211.16521.20191.28981.16341.08711.03690.941
SGAI 0.93720.910.90770.89110.95310.91260.90970.91470.92220.9608
LVGI 0.84571.01130.91110.89520.78780.55610.45640.47270.60760.7047
TATA -0.0063-0.0149-0.056-0.0738-0.049-0.1359-0.0804-0.0963-0.06770.0287
M-score -2.34-2.63-3.08-3.01-2.72-3.05-2.49-2.92-2.48-1.85
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