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Matthews International Corporation (NAS:MATW)
Beneish M-Score
-2.35 (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 -2.35 suggests that the company is not a manipulator.

MATW' s 10-Year Beneish M-Score Range
Min: -3.3   Max: -2.03
Current: -2.35

-3.3
-2.03

During the past 13 years, the highest Beneish M-Score of Matthews International Corporation was -2.03. The lowest was -3.30. 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 * 0.9647+0.528 * 1.0117+0.404 * 1.226+0.892 * 1.3944+0.115 * 0.7743
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0827+4.679 * -0.0433-0.327 * 1.1229
=-2.35

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 23.14 + 9.576 + 14.951 + 4.805 = $52 Mil.
Non Operating Income was 9.903 + -0.536 + -0.164 + -3.791 = $5 Mil.
Cash Flow from Operations was 48.223 + 44.824 + 9.292 + 28.264 = $131 Mil.
Accounts Receivable was $199 Mil.
Revenue was 279.983 + 246.837 + 229.945 + 252.706 = $1,009 Mil.
Gross Profit was 104.23 + 90.18 + 81.376 + 90.287 = $366 Mil.
Total Current Assets was $455 Mil.
Total Assets was $1,259 Mil.
Property, Plant and Equipment(Net PPE) was $175 Mil.
Depreciation, Depletion and Amortization(DDA) was $39 Mil.
Selling, General & Admin. Expense(SGA) was $277 Mil.
Total Current Liabilities was $192 Mil.
Long-Term Debt was $345 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)
=(268.306 / 1407.562) / (199.472 / 1009.471)
=0.19061754 / 0.19760053
=0.9647

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)
=(127.695 / 1009.471) / (135.436 / 1407.562)
=0.36263845 / 0.35842755
=1.0117

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 - (548.868 + 198.992) / 1930.382) / (1 - (454.835 + 175.03) / 1258.87)
=0.61258445 / 0.49965842
=1.226

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
=1407.562 / 1009.471
=1.3944

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))
=(39.404 / (39.404 + 175.03)) / (61.915 / (61.915 + 198.992))
=0.18375817 / 0.23730678
=0.7743

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)
=(417.774 / 1407.562) / (276.735 / 1009.471)
=0.29680682 / 0.27413863
=1.0827

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)
=((676.418 + 249.014) / 1930.382) / ((345.407 + 192.061) / 1258.87)
=0.47940356 / 0.4269448
=1.1229

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
=(52.472 - 5.412 - 130.603) / 1930.382
=-0.0433

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 -2.35 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

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 1.04860.94320.94851.10021.00241.0330.99731.05830.92931.4173
GMI 1.09220.91791.01490.94871.04510.95931.00581.04661.03321.0201
AQI 1.07551.03911.00220.94441.0470.99761.01640.96890.99221.1874
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 1.27080.90460.95841.20870.9350.96461.11791.01111.04931.0725
TATA -0.0244-0.0019-0.0164-0.0299-0.037-0.0389-0.0214-0.0215-0.0438-0.0218
M-score -2.33-2.46-2.54-2.54-2.66-2.59-2.53-2.52-2.67-2.03

Matthews International Corporation Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.08161.00670.92930.85990.95881.03711.41731.26041.04750.9647
GMI 1.02141.02751.03321.03021.02981.00941.02011.01261.00721.0117
AQI 0.99041.01060.99220.96750.96070.92941.18741.19281.19921.226
SGI 1.02791.05791.09451.08911.04321.04851.1231.23291.34961.3944
DEPI 1.07951.02850.96250.81750.85920.90561.01910.93350.83190.7743
SGAI 1.07071.02740.98480.9840.98531.02211.05731.05041.06861.0827
LVGI 1.11161.05431.04930.94080.93170.96281.07251.08831.11381.1229
TATA -0.0298-0.0402-0.0408-0.0456-0.0393-0.0343-0.0215-0.0168-0.0353-0.0433
M-score -2.55-2.61-2.66-2.74-2.65-2.59-2.03-2.07-2.27-2.35
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