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Matthews International Corporation (NAS:MATW)
Beneish M-Score
-2.59 (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.

Matthews International Corporation has a M-score of -2.59 suggests that the company is not a manipulator.

MATW' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -2.16
Current: -2.59

-3.28
-2.16

During the past 13 years, the highest Beneish M-Score of Matthews International Corporation was -2.16. The lowest was -3.28. And the median was -2.53.


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 Matthews International Corporation 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 * 1.0371+0.528 * 1.0094+0.404 * 0.9294+0.892 * 1.0485+0.115 * 0.9056
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.014+4.679 * -0.0358-0.327 * 0.9628
=-2.59

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $199.5 Mil.
Revenue was 279.983 + 246.837 + 229.945 + 252.706 = $1,009.5 Mil.
Gross Profit was 104.23 + 90.18 + 81.376 + 90.287 = $366.1 Mil.
Total Current Assets was $454.8 Mil.
Total Assets was $1,258.9 Mil.
Property, Plant and Equipment(Net PPE) was $175.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $39.4 Mil.
Selling, General & Admin. Expense(SGA) was $274.5 Mil.
Total Current Liabilities was $192.1 Mil.
Long-Term Debt was $345.4 Mil.
Net Income was 19.263 + 11.333 + 7.914 + 14.45 = $53.0 Mil.
Non Operating Income was -0.441 + -0.79 + -0.982 + 0.253 = $-2.0 Mil.
Cash Flow from Operations was 39.939 + 11.336 + 12.272 + 36.388 = $99.9 Mil.
Accounts Receivable was $183.4 Mil.
Revenue was 250.652 + 256.39 + 225.609 + 230.081 = $962.7 Mil.
Gross Profit was 91.391 + 94.866 + 79.974 + 86.159 = $352.4 Mil.
Total Current Assets was $392.2 Mil.
Total Assets was $1,210.6 Mil.
Property, Plant and Equipment(Net PPE) was $167.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $33.4 Mil.
Selling, General & Admin. Expense(SGA) was $258.2 Mil.
Total Current Liabilities was $177.3 Mil.
Long-Term Debt was $359.6 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)
=(199.472 / 1009.471) / (183.437 / 962.732)
=0.19760053 / 0.19053797
=1.0371

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)
=(90.18 / 962.732) / (104.23 / 1009.471)
=0.36603125 / 0.36263845
=1.0094

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 - (454.835 + 175.03) / 1258.87) / (1 - (392.184 + 167.531) / 1210.56)
=0.49965842 / 0.5376396
=0.9294

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
=1009.471 / 962.732
=1.0485

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))
=(33.444 / (33.444 + 167.531)) / (39.404 / (39.404 + 175.03))
=0.16640876 / 0.18375817
=0.9056

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)
=(274.53 / 1009.471) / (258.209 / 962.732)
=0.27195432 / 0.26820444
=1.014

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)
=((345.407 + 192.061) / 1258.87) / ((359.561 + 177.255) / 1210.56)
=0.4269448 / 0.44344436
=0.9628

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
=(52.96 - -1.96 - 99.935) / 1258.87
=-0.0358

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.

Matthews International Corporation has a M-score of -2.59 suggests that the company will not 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 own currency.

Matthews International Corporation Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 1.25481.04860.94320.94851.10021.00241.0330.99731.05830.9858
GMI 0.97461.09220.91791.01490.94871.04510.95931.00581.04661.0332
AQI 1.04551.07031.04411.00220.94441.0470.99761.01640.98220.9741
SGI 1.10881.25751.11891.04671.09240.95391.05241.09371.00171.0945
DEPI 0.99480.96720.93371.04451.28370.8121.03441.01981.02310.9625
SGAI 0.97051.00931.15981.01931.03141.0691.01421.03081.04050.9804
LVGI 1.02451.27730.90.95841.20870.9350.96461.11791.01111.0371
TATA -0.054-0.0257-0.0016-0.0164-0.0299-0.037-0.0389-0.0214-0.0215-0.0436
M-score -2.40-2.34-2.46-2.54-2.54-2.66-2.59-2.53-2.52-2.62

Matthews International Corporation Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.03831.02721.05831.12561.08161.00670.98580.85990.95881.0371
GMI 1.04871.05621.04661.03361.02141.02751.03321.03021.02981.0094
AQI 0.99740.99770.98220.99260.99041.01060.97410.96750.96070.9294
SGI 1.06851.04161.001711.02791.05791.09451.08911.04321.0485
DEPI 1.04411.01521.02311.1931.07951.02850.96250.81750.85920.9056
SGAI 0.98590.9971.04051.05531.07071.02740.98040.97840.97851.014
LVGI 1.11641.08331.01111.0961.11161.05431.03710.94080.93170.9628
TATA -0.0168-0.0228-0.02-0.0204-0.0229-0.0322-0.0425-0.047-0.0401-0.0358
M-score -2.47-2.52-2.51-2.46-2.52-2.57-2.61-2.74-2.66-2.59
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