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GuruFocus has detected 5 Warning Signs with Mattersight Corp $MATR.
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Mattersight Corp (NAS:MATR)
Beneish M-Score
-2.08 (As of Today)

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 -2.08 signals that the company is a manipulator.

MATR' s Beneish M-Score Range Over the Past 10 Years
Min: -6.17   Max: 1.63
Current: -2.08

-6.17
1.63

During the past 13 years, the highest Beneish M-Score of Mattersight Corp was 1.63. The lowest was -6.17. And the median was -3.19.


Definition

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 * 1.9865+0.528 * 1.0893+0.404 * 1.3324+0.892 * 1.0547+0.115 * 0.9581
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0679+4.679 * -0.0743-0.327 * 2.1375
=-2.08

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $8.80 Mil.
Revenue was 12.558 + 10.412 + 9.074 + 10.053 = $42.10 Mil.
Gross Profit was 8.654 + 6.969 + 5.879 + 6.807 = $28.31 Mil.
Total Current Assets was $25.78 Mil.
Total Assets was $45.56 Mil.
Property, Plant and Equipment(Net PPE) was $9.58 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.95 Mil.
Selling, General & Admin. Expense(SGA) was $28.68 Mil.
Total Current Liabilities was $15.14 Mil.
Long-Term Debt was $22.44 Mil.
Net Income was -3.118 + -5.838 + -6.2 + -5.821 = $-20.98 Mil.
Non Operating Income was 0.117 + 0.066 + 0 + 0 = $0.18 Mil.
Cash Flow from Operations was 0.312 + -7.485 + -5.23 + -5.373 = $-17.78 Mil.
Accounts Receivable was $4.20 Mil.
Revenue was 10.372 + 10.482 + 9.742 + 9.316 = $39.91 Mil.
Gross Profit was 7.479 + 7.943 + 7.073 + 6.741 = $29.24 Mil.
Total Current Assets was $25.09 Mil.
Total Assets was $40.40 Mil.
Property, Plant and Equipment(Net PPE) was $8.52 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.94 Mil.
Selling, General & Admin. Expense(SGA) was $25.46 Mil.
Total Current Liabilities was $13.98 Mil.
Long-Term Debt was $1.61 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(8.8 / 42.097) / (4.2 / 39.912)
=0.20904102 / 0.10523151
=1.9865

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)
=(29.236 / 39.912) / (28.309 / 42.097)
=0.73251153 / 0.67247072
=1.0893

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (25.782 + 9.576) / 45.564) / (1 - (25.087 + 8.523) / 40.402)
=0.22399263 / 0.16811049
=1.3324

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=42.097 / 39.912
=1.0547

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))
=(4.942 / (4.942 + 8.523)) / (5.946 / (5.946 + 9.576))
=0.36702562 / 0.38306919
=0.9581

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)
=(28.676 / 42.097) / (25.459 / 39.912)
=0.68118868 / 0.63787833
=1.0679

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)
=((22.441 + 15.142) / 45.564) / ((1.614 + 13.977) / 40.402)
=0.82483979 / 0.38589674
=2.1375

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
=(-20.977 - 0.183 - -17.776) / 45.564
=-0.0743

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 -2.08 signals that the company is likely to be a manipulator.


Related Terms

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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Mattersight Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.77720.98940.83540.60061.5860.86870.87931.63240.96681.9865
GMI 0.60061.0121.02730.62620.89140.88320.89210.98550.9421.0893
AQI 1.1290.94791.27820.46041.64091.31451.18940.82381.07961.3324
SGI 1.13670.89321.11420.30390.9421.16391.01860.8791.31641.0547
DEPI 1.03520.83170.94170.9570.98841.0411.04951.01441.08870.9581
SGAI 1.68141.03590.73152.63321.0450.95860.59911.05971.06021.0679
LVGI 1.37981.00221.17871.40590.56131.19031.06061.05370.74372.1375
TATA -0.335-0.3148-0.2601-0.15570.7035-0.1348-0.4097-0.2237-0.2303-0.0748
M-score -4.53-4.10-3.64-5.031.64-3.07-4.42-3.16-3.22-2.08

Mattersight Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.35531.63241.84362.4041.14710.96681.28210.78371.34931.9865
GMI 0.9120.98550.97910.98010.96680.94190.9731.01021.07081.0893
AQI 0.7920.82380.90721.01851.05591.07960.6230.85061.44561.3324
SGI 0.92190.8790.99131.08481.20851.31641.24611.14151.05511.0547
DEPI 1.04541.01441.01141.16071.07781.08871.04660.88210.98560.9581
SGAI 0.43591.23921.08191.26971.50480.90671.09781.16431.16971.0679
LVGI 0.72061.05371.3161.06280.81370.74370.97120.95122.07682.1375
TATA -0.2184-0.2237-0.1863-0.1828-0.1741-0.2303-0.2012-0.211-0.0136-0.0743
M-score -3.18-3.19-2.75-2.02-2.99-3.19-3.11-3.62-2.34-2.08
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