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Matthews International Corporation (NAS:MATW)
Beneish M-Score
-2.11 (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 -2.11 signals that the company is a manipulator.

MATW' s 10-Year Beneish M-Score Range
Min: -2.74   Max: -2.11
Current: -2.11

-2.74
-2.11

During the past 13 years, the highest Beneish M-Score of Matthews International Corporation was -2.11. The lowest was -2.74. 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 * 1.3362+0.528 * 1.0201+0.404 * 1.1884+0.892 * 1.123+0.115 * 1.0191
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0574+4.679 * -0.0211-0.327 * 1.081
=-2.11

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $283 Mil.
Revenue was 349.832 + 279.983 + 246.837 + 229.945 = $1,107 Mil.
Gross Profit was 116.708 + 104.23 + 90.18 + 81.376 = $392 Mil.
Total Current Assets was $574 Mil.
Total Assets was $2,032 Mil.
Property, Plant and Equipment(Net PPE) was $209 Mil.
Depreciation, Depletion and Amortization(DDA) was $43 Mil.
Selling, General & Admin. Expense(SGA) was $310 Mil.
Total Current Liabilities was $253 Mil.
Long-Term Debt was $714 Mil.
Net Income was 5.164 + 19.263 + 11.333 + 7.914 = $44 Mil.
Non Operating Income was -3.544 + -0.441 + -0.79 + -0.982 = $-6 Mil.
Cash Flow from Operations was 28.852 + 39.939 + 11.336 + 12.272 = $92 Mil.
Accounts Receivable was $188 Mil.
Revenue was 252.706 + 250.652 + 256.39 + 225.609 = $985 Mil.
Gross Profit was 90.287 + 91.391 + 94.866 + 79.974 = $357 Mil.
Total Current Assets was $406 Mil.
Total Assets was $1,215 Mil.
Property, Plant and Equipment(Net PPE) was $181 Mil.
Depreciation, Depletion and Amortization(DDA) was $38 Mil.
Selling, General & Admin. Expense(SGA) was $261 Mil.
Total Current Liabilities was $184 Mil.
Long-Term Debt was $351 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)
=(282.73 / 1106.597) / (188.405 / 985.357)
=0.255495 / 0.19120481
=1.3362

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)
=(104.23 / 985.357) / (116.708 / 1106.597)
=0.36181607 / 0.35468558
=1.0201

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 - (573.915 + 209.315) / 2031.735) / (1 - (405.982 + 180.731) / 1214.927)
=0.61450189 / 0.51707963
=1.1884

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
=1106.597 / 985.357
=1.123

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))
=(37.865 / (37.865 + 180.731)) / (42.864 / (42.864 + 209.315))
=0.17321909 / 0.1699745
=1.0191

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)
=(309.603 / 1106.597) / (260.726 / 985.357)
=0.27977936 / 0.26460055
=1.0574

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)
=((714.027 + 253.283) / 2031.735) / ((351.068 + 184.006) / 1214.927)
=0.47610048 / 0.44041658
=1.081

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
=(43.674 - -5.757 - 92.399) / 2031.735
=-0.0211

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 -2.11 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 own currency.

Matthews International Corporation Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 1.04860.94320.94851.10021.00241.0330.99731.05830.98581.3362
GMI 1.09220.91791.01490.94871.04510.95931.00581.04661.03321.0201
AQI 1.07551.03911.00220.94441.0470.99761.01640.98220.97411.1884
SGI 1.25751.11891.04671.09240.95391.05241.09371.00171.09451.123
DEPI 0.96720.93371.04451.28370.8121.03441.01981.02310.96251.0191
SGAI 1.00461.13311.01931.03141.0691.01421.03081.04050.98041.0574
LVGI 1.27080.90460.95841.20870.9350.96461.11791.01111.03711.081
TATA -0.0244-0.0019-0.0164-0.0299-0.037-0.0389-0.0214-0.0215-0.0436-0.0218
M-score -2.33-2.46-2.54-2.54-2.66-2.59-2.53-2.52-2.62-2.11

Matthews International Corporation Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.02721.05831.12561.08161.00670.98580.85990.95881.03711.3362
GMI 1.05621.04661.03361.02141.02751.03321.03021.02981.00941.0201
AQI 0.99770.98220.99260.99041.01060.97410.96750.96070.92941.1884
SGI 1.04161.001711.02791.05791.09451.08911.04321.04851.123
DEPI 1.01521.02311.1931.07951.02850.96250.81750.85920.90561.0191
SGAI 0.9971.04051.05531.07071.02740.98040.97840.97851.0141.0574
LVGI 1.08331.01111.0961.11161.05431.03710.94080.93170.96281.081
TATA -0.0228-0.02-0.0204-0.026-0.0321-0.0436-0.0481-0.0381-0.0369-0.0211
M-score -2.52-2.51-2.46-2.53-2.57-2.62-2.75-2.65-2.60-2.11
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