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Matthews International Corporation (NAS:MATW)
Beneish M-Score
-2.65 (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 -2.65 suggests that the company is not a manipulator.

MATW' s Beneish M-Score Range Over the Past 10 Years
Min: -3.29   Max: -2.03
Current: -2.65

-3.29
-2.03

During the past 13 years, the highest Beneish M-Score of Matthews International Corporation was -2.03. The lowest was -3.29. And the median was -2.52.


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 * 1.0165+0.528 * 0.9571+0.404 * 1.0015+0.892 * 1.0456+0.115 * 1.0511
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0056+4.679 * -0.0354-0.327 * 1.1417
=-2.65

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $285 Mil.
Revenue was 382.061 + 367.176 + 354.232 + 368.338 = $1,472 Mil.
Gross Profit was 145.297 + 137.76 + 126.567 + 141.574 = $551 Mil.
Total Current Assets was $600 Mil.
Total Assets was $2,127 Mil.
Property, Plant and Equipment(Net PPE) was $222 Mil.
Depreciation, Depletion and Amortization(DDA) was $65 Mil.
Selling, General & Admin. Expense(SGA) was $439 Mil.
Total Current Liabilities was $266 Mil.
Long-Term Debt was $898 Mil.
Net Income was 23.915 + 14.357 + 4.614 + 16.974 = $60 Mil.
Non Operating Income was 0.46 + -0.192 + -0.874 + -1.356 = $-2 Mil.
Cash Flow from Operations was 46.514 + 41.872 + 10.019 + 38.725 = $137 Mil.
Accounts Receivable was $268 Mil.
Revenue was 364.752 + 349.394 + 343.584 + 349.832 = $1,408 Mil.
Gross Profit was 135.436 + 127.695 + 124.67 + 116.708 = $505 Mil.
Total Current Assets was $549 Mil.
Total Assets was $1,930 Mil.
Property, Plant and Equipment(Net PPE) was $199 Mil.
Depreciation, Depletion and Amortization(DDA) was $62 Mil.
Selling, General & Admin. Expense(SGA) was $418 Mil.
Total Current Liabilities was $249 Mil.
Long-Term Debt was $676 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)
=(285.184 / 1471.807) / (268.306 / 1407.562)
=0.19376454 / 0.19061754
=1.0165

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)
=(504.509 / 1407.562) / (551.198 / 1471.807)
=0.35842755 / 0.37450427
=0.9571

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 - (599.718 + 222.32) / 2126.822) / (1 - (548.868 + 198.992) / 1930.382)
=0.61348999 / 0.61258445
=1.0015

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
=1471.807 / 1407.562
=1.0456

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))
=(61.915 / (61.915 + 198.992)) / (64.827 / (64.827 + 222.32))
=0.23730678 / 0.22576241
=1.0511

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)
=(439.297 / 1471.807) / (417.774 / 1407.562)
=0.2984746 / 0.29680682
=1.0056

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)
=((898.177 + 265.917) / 2126.822) / ((676.418 + 249.014) / 1930.382)
=0.54733965 / 0.47940356
=1.1417

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
=(59.86 - -1.962 - 137.13) / 2126.822
=-0.0354

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 -2.65 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

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 0.94320.94851.10021.00241.0330.99731.05830.92931.41730.7794
GMI 0.91791.01490.94871.04510.95931.00581.04661.03321.02010.9555
AQI 1.03911.00220.94441.0470.99761.01640.96890.99221.18740.9826
SGI 1.11891.04671.09240.95391.05241.09371.00171.09451.1231.2887
DEPI 0.93371.04451.28370.8121.03441.01981.02310.96251.01910.7872
SGAI 1.13311.01931.03141.0691.01421.03081.04480.98081.05731.0589
LVGI 0.90460.95841.20870.9350.96461.11791.01111.04931.07251.1031
TATA 0.0022-0.0128-0.0299-0.037-0.0364-0.0248-0.0223-0.0415-0.0213-0.0382
M-score -2.44-2.52-2.54-2.66-2.58-2.55-2.53-2.66-2.03-2.70

Matthews International Corporation Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.95881.03711.41731.26041.04750.96470.77940.85090.95061.0165
GMI 1.02981.00941.02011.01261.00721.01170.95550.96580.96140.9571
AQI 0.96070.92941.18741.19281.19921.2260.98260.99991.01251.0015
SGI 1.04321.04851.1231.23291.34961.39441.28871.17741.09961.0456
DEPI 0.85920.90561.01910.93350.83190.77430.78720.88531.02151.0511
SGAI 0.98161.01821.05731.05041.06861.08271.05891.08791.05361.0056
LVGI 0.93170.96281.07251.08831.11381.12291.10311.12531.08561.1417
TATA -0.0393-0.0343-0.0215-0.0161-0.0336-0.0425-0.0382-0.0444-0.0415-0.0354
M-score -2.65-2.59-2.03-2.07-2.27-2.34-2.70-2.75-2.68-2.65
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