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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.
Mattersight Corp has a M-score of -4.22 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Mattersight Corp was 1.54. The lowest was -7.62. And the median was -3.18.
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 Mattersight 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 * 0.7781||+||0.528 * 0.8996||+||0.404 * 1.3645||+||0.892 * 0.9835||+||0.115 * 1.0683|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9204||+||4.679 * -0.3588||-||0.327 * 0.8836|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $2.44 Mil.|
Revenue was 7.013 + 9.267 + 8.665 + 7.964 = $32.91 Mil.
Gross Profit was 4.78 + 6.89 + 5.725 + 5.203 = $22.60 Mil.
Total Current Assets was $15.21 Mil.
Total Assets was $25.88 Mil.
Property, Plant and Equipment(Net PPE) was $4.92 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.29 Mil.
Selling, General & Admin. Expense(SGA) was $29.67 Mil.
Total Current Liabilities was $12.29 Mil.
Long-Term Debt was $0.00 Mil.
Net Income was -3.963 + -1.543 + -2.633 + -3.323 = $-11.46 Mil.
Non Operating Income was -0.37 + 0 + 0 + 0 = $-0.37 Mil.
Cash Flow from Operations was -4.223 + -1.507 + 6.32 + -2.396 = $-1.81 Mil.
|Accounts Receivable was $3.18 Mil.
Revenue was 8.598 + 8.725 + 8.104 + 8.035 = $33.46 Mil.
Gross Profit was 5.637 + 5.227 + 5.007 + 4.799 = $20.67 Mil.
Total Current Assets was $20.42 Mil.
Total Assets was $30.14 Mil.
Property, Plant and Equipment(Net PPE) was $4.81 Mil.
Depreciation, Depletion and Amortization(DDA) was $3.60 Mil.
Selling, General & Admin. Expense(SGA) was $32.77 Mil.
Total Current Liabilities was $16.19 Mil.
Long-Term Debt was $0.00 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(2.435 / 32.909)||/||(3.182 / 33.462)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(6.89 / 33.462)||/||(4.78 / 32.909)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (15.207 + 4.922) / 25.882)||/||(1 - (20.421 + 4.805) / 30.135)|
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.
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))|
|=||(3.599 / (3.599 + 4.805))||/||(3.293 / (3.293 + 4.922))|
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)|
|=||(29.666 / 32.909)||/||(32.772 / 33.462)|
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 + 12.287) / 25.882)||/||((0 + 16.191) / 30.135)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-11.462 - -0.37||-||-1.806)||/||25.882|
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.
Mattersight Corp has a M-score of -4.22 suggests that the company will not be a manipulator.
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
Mattersight Corp Annual Data
Mattersight Corp Quarterly Data