Montier 'Cooking the Books' Score TTM

The Montier C-Score is a way identify companies that have an increased risk of earnings manipulation. James Montier aimed to create a simple scoring system that would highlight such companies and the C-Score was the result. This is measured on a TTM basis.

Stockopedia explains Montier C-Score

An analogue to the Piotroski, it measures six inputs in a binary fashion to create a score between zero and six. Inputs include: the divergence between net income and cash-flow, increasing days sales outstanding, increasing days sales of inventory, increasing current assets to revenues, declining depreciation relative to PPE and high total asset growth.

Montier found that companies with high C-Scores under performed the market by 8% per annum, generating a mere 1.8% return between 1993 and 2007.

He recommended using it in tandem with a high valuation measure. A C Score of 5 used in tandem with a Price/Sales Ratio of greater than 2 generated a negative absolute return of 4% p.a. in the US.

For a full review of the C-Score please click here.

Ranks: Low to High
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The 5 lowest Montier C-Score Stocks in the Market

Ticker Name Montier C-Score StockRank
EPA:COFA Coface SA 0 85
ASX:AKP Audio Pixels Holdings 0 1
ASX:SUN Suncorp 0 87
NYQ:ORI Old Republic International 0 96
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