Cognizant Technology Solutions (BSP:CTSH34) Beneish M-Score : -2.21 (As of May. 04, 2024)

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What is Cognizant Technology Solutions Beneish M-Score?

The zones of discrimination for M-Score is as such:

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.

Good Sign:

Beneish M-Score -2.21 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Cognizant Technology Solutions's Beneish M-Score or its related term are showing as below:

BSP:CTSH34' s Beneish M-Score Range Over the Past 10 Years
Min: -2.95 Med: -2.48 Max: -1.55
Current: -2.21

During the past 13 years, the highest Beneish M-Score of Cognizant Technology Solutions was -1.55. The lowest was -2.95. And the median was -2.48.

Cognizant Technology Solutions Beneish M-Score Historical Data

The historical data trend for Cognizant Technology Solutions'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.

* Premium members only.

Cognizant Technology Solutions Beneish M-Score Chart

Cognizant Technology Solutions Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

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-2.54

-2.93

-2.43

-2.44

-2.40

Cognizant Technology Solutions Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Beneish M-Score	Get a 7-Day Free Trial															-2.60	-2.46	-2.37	-2.40	-2.21

Competitive Comparison of Cognizant Technology Solutions's Beneish M-Score

For the Information Technology Services subindustry, Cognizant Technology Solutions'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.

Cognizant Technology Solutions's Beneish M-Score Distribution in the Software Industry

For the Software industry and Technology sector, Cognizant Technology Solutions's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Cognizant Technology Solutions's Beneish M-Score falls into.

Cognizant Technology Solutions 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 Cognizant Technology Solutions for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 1.0425

0.528 * 1.0369

0.404 * 1.0651

0.892 * 0.9428

0.115 * 0.88

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.937

4.679 * 0.034343

0.327 * 0.874

-2.25

This Year (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was R$19,033 Mil.
Revenue was 23703.848 + 23313.248 + 24184.814 + 23715.178 = R$94,917 Mil.
Gross Profit was 8037.397 + 8216.965 + 8336.526 + 8032.874 = R$32,624 Mil.
Total Current Assets was R$35,287 Mil.
Total Assets was R$91,668 Mil.
Property, Plant and Equipment(Net PPE) was R$8,092 Mil.
Depreciation, Depletion and Amortization(DDA) was R$2,734 Mil.
Selling, General, & Admin. Expense(SGA) was R$15,645 Mil.
Total Current Liabilities was R$14,999 Mil.
Long-Term Debt & Capital Lease Obligation was R$5,483 Mil.
Net Income was 2718.971 + 2734.088 + 2592.818 + 2247.263 = R$10,293 Mil.
Non Operating Income was -74.697 + -186.192 + -325.954 + -616.42 = R$-1,203 Mil.
Cash Flow from Operations was 473.081 + 3611.153 + 4089.244 + 174.733 = R$8,348 Mil.

Total Receivables was R$19,366 Mil.
Revenue was 25063.783 + 25382.491 + 25468.165 + 24764.016 = R$100,678 Mil.
Gross Profit was 8693.153 + 8848.99 + 9317.877 + 9020.24 = R$35,880 Mil.
Total Current Assets was R$37,648 Mil.
Total Assets was R$94,520 Mil.
Property, Plant and Equipment(Net PPE) was R$10,126 Mil.
Depreciation, Depletion and Amortization(DDA) was R$2,893 Mil.
Selling, General, & Admin. Expense(SGA) was R$17,711 Mil.
Total Current Liabilities was R$17,298 Mil.
Long-Term Debt & Capital Lease Obligation was R$6,865 Mil.

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)
	=	(19032.796 / 94917.088)	/	(19365.575 / 100678.455)
	=	0.20052	/	0.192351
	=	1.0425

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)
	=	(35880.26 / 100678.455)	/	(32623.762 / 94917.088)
	=	0.356385	/	0.343708
	=	1.0369

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 - (35286.863 + 8092.175) / 91668.158)	/	(1 - (37647.761 + 10125.518) / 94520.464)
	=	0.526782	/	0.494572
	=	1.0651

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
	=	94917.088	/	100678.455
	=	0.9428

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))
	=	(2893.353 / (2893.353 + 10125.518))	/	(2734.108 / (2734.108 + 8092.175))
	=	0.222243	/	0.252544
	=	0.88

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)
	=	(15645.26 / 94917.088)	/	(17711.481 / 100678.455)
	=	0.164831	/	0.175921
	=	0.937

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)
	=	((5482.76 + 14999.158) / 91668.158)	/	((6864.935 + 17297.761) / 94520.464)
	=	0.223435	/	0.255635
	=	0.874

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
	=	(10293.14 - -1203.263	-	8348.211)	/	91668.158
	=	0.034343

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.

Cognizant Technology Solutions has a M-score of -2.25 suggests that the company is unlikely to be a manipulator.

Cognizant Technology Solutions Beneish M-Score Related Terms

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Cognizant Technology Solutions (BSP:CTSH34) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Cognizant Technology Solutions Corp (BSP:CTSH34) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

CTSH:USA CTSH:Mexico COZ:Germany

Address

300 Frank West Burr Boulevard, Suite 36, 6th Floor, Teaneck, NJ, USA, 07666

Website

https://www.cognizant.com

Cognizant is a global IT services provider, offering consulting and outsourcing services to some of the world's largest enterprises spanning the financial services, media and communications, healthcare, natural resources, and consumer products industries. Cognizant employs nearly 300,000 people globally, roughly 70% of whom are in India, although the company's headquarters are in Teaneck, New Jersey.

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