Cloudflare Beneish M-Score Historical Data
The historical data trend for Cloudflare's Beneish M-Score can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Cloudflare Beneish M-Score Chart
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Cloudflare Annual Data
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Trend |
Dec16 |
Dec17 |
Dec18 |
Dec19 |
Dec20 |
Dec21 |
Dec22 |
Dec23 |
| Beneish M-Score |
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-1.79 |
-2.84 |
-2.80 |
-2.02 |
-2.58 |
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Cloudflare Quarterly Data
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Mar19 |
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Dec23 |
| Beneish M-Score |
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-2.02 |
-2.31 |
-2.80 |
-2.71 |
-2.58 |
Competitive Comparison of Cloudflare's Beneish M-Score
For the Software - Infrastructure subindustry, Cloudflare's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Cloudflare's Beneish M-Score Distribution in the Software Industry
For the Software industry and Technology sector, Cloudflare's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Cloudflare's Beneish M-Score falls into.
Cloudflare Beneish M-Score Calculation
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Cloudflare 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 * 1.2434 | + | 0.528 * 0.9977 | + | 0.404 * 1.052 | + | 0.892 * 1.3297 | + | 0.115 * 0.8632 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9519 | + | 4.679 * -0.139027 | - | 0.327 * 0.9485 |
| = | -2.58 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
| This Year (Dec23) TTM: | Last Year (Dec22) TTM: |
Total Receivables was $259 Mil.
Revenue was 362.473 + 335.603 + 308.494 + 290.175 = $1,297 Mil.
Gross Profit was 279.19 + 257.534 + 233.273 + 219.743 = $990 Mil.
Total Current Assets was $1,983 Mil.
Total Assets was $2,760 Mil.
Property, Plant and Equipment(Net PPE) was $461 Mil.
Depreciation, Depletion and Amortization(DDA) was $136 Mil.
Selling, General, & Admin. Expense(SGA) was $817 Mil.
Total Current Liabilities was $567 Mil.
Long-Term Debt & Capital Lease Obligation was $1,397 Mil.
Net Income was -27.865 + -23.535 + -94.467 + -38.082 = $-184 Mil.
Non Operating Income was -2.103 + 0.115 + -51.827 + -0.857 = $-55 Mil.
Cash Flow from Operations was 85.441 + 68.1 + 64.451 + 36.414 = $254 Mil.
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Total Receivables was $157 Mil.
Revenue was 274.7 + 253.857 + 234.517 + 212.167 = $975 Mil.
Gross Profit was 206.912 + 191.89 + 178.713 + 165.116 = $743 Mil.
Total Current Assets was $1,888 Mil.
Total Assets was $2,588 Mil.
Property, Plant and Equipment(Net PPE) was $419 Mil.
Depreciation, Depletion and Amortization(DDA) was $102 Mil.
Selling, General, & Admin. Expense(SGA) was $646 Mil.
Total Current Liabilities was $398 Mil.
Long-Term Debt & Capital Lease Obligation was $1,544 Mil.
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1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total 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) |
| = | (259.309 / 1296.745) | / | (156.836 / 975.241) |
| = | 0.199969 | / | 0.160818 |
| | = | 1.2434 |
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) |
| = | (742.631 / 975.241) | / | (989.74 / 1296.745) |
| = | 0.761485 | / | 0.76325 |
| | = | 0.9977 |
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 Property, Plant and Equipment to Total Assets.
| AQI | = | (1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) | / | (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1) |
| = | (1 - (1983.077 + 461.369) / 2759.767) | / | (1 - (1887.884 + 418.96) / 2587.908) |
| = | 0.114256 | / | 0.108607 |
| | = | 1.052 |
4. SGI = Sales Growth Index
Ratio of Revenue 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 |
| = | 1296.745 | / | 975.241 |
| | = | 1.3297 |
5. DEPI = Depreciation Index
Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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)) |
| = | (102.335 / (102.335 + 418.96)) | / | (135.82 / (135.82 + 461.369)) |
| = | 0.196309 | / | 0.227432 |
| | = | 0.8632 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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) |
| = | (817.082 / 1296.745) | / | (645.531 / 975.241) |
| = | 0.630102 | / | 0.661919 |
| | = | 0.9519 |
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 in leverage
| LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
| = | ((1396.852 + 567.084) / 2759.767) | / | ((1543.816 + 397.87) / 2587.908) |
| = | 0.711631 | / | 0.750292 |
| | = | 0.9485 |
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 |
| = | (-183.949 - -54.672 | - | 254.406) | / | 2759.767 |
| | = | -0.139027 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Cloudflare has a M-score of -2.58 suggests that the company is unlikely to be a manipulator.
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