Montier 'Cooking the Books' Score

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.

Ranks: Low to HighAvailable in screenerAvailable as Table Column

The 5 highest Montier C-Score Stocks in the Market

TickerNameMontier C-ScoreStockRank™
LON:CARRCarr's0.0085
LON:NWGNatwest0.0086
LON:UU.United Utilities0.0022
LON:VODVodafone0.0062
LON:WPPWPP0.0056