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Matthews International Corporation (NAS:MATW)
Beneish M-Score
-2.75 (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 -2.75 suggests that the company is not a manipulator.

MATW' s 10-Year Beneish M-Score Range
Min: -3.3   Max: -2.19
Current: -2.75

-3.3
-2.19

During the past 13 years, the highest Beneish M-Score of Matthews International Corporation was -2.19. 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 * 0.8599+0.528 * 1.0302+0.404 * 0.9675+0.892 * 1.0891+0.115 * 0.8175
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9784+4.679 * -0.0477-0.327 * 0.9408
=-2.75

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $172.2 Mil.
Revenue was 229.945 + 252.706 + 250.652 + 256.39 = $989.7 Mil.
Gross Profit was 81.376 + 90.287 + 91.391 + 94.866 = $357.9 Mil.
Total Current Assets was $408.0 Mil.
Total Assets was $1,217.3 Mil.
Property, Plant and Equipment(Net PPE) was $178.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $39.0 Mil.
Selling, General & Admin. Expense(SGA) was $263.6 Mil.
Total Current Liabilities was $173.7 Mil.
Long-Term Debt was $352.2 Mil.
Net Income was 7.914 + 14.45 + 17.991 + 14.192 = $54.5 Mil.
Non Operating Income was -0.982 + 1.727 + -0.986 + -1.067 = $-1.3 Mil.
Cash Flow from Operations was 12.272 + 36.388 + 39.498 + 25.703 = $113.9 Mil.
Accounts Receivable was $183.8 Mil.
Revenue was 225.609 + 230.081 + 227.478 + 225.545 = $908.7 Mil.
Gross Profit was 79.974 + 86.159 + 87.709 + 84.707 = $338.5 Mil.
Total Current Assets was $399.5 Mil.
Total Assets was $1,235.0 Mil.
Property, Plant and Equipment(Net PPE) was $173.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.9 Mil.
Selling, General & Admin. Expense(SGA) was $247.4 Mil.
Total Current Liabilities was $187.9 Mil.
Long-Term Debt was $379.3 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)
=(172.182 / 989.693) / (183.841 / 908.713)
=0.17397516 / 0.2023092
=0.8599

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)
=(90.287 / 908.713) / (81.376 / 989.693)
=0.37255877 / 0.3616475
=1.0302

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 - (407.971 + 178.119) / 1217.301) / (1 - (399.545 + 173.555) / 1235.035)
=0.51853321 / 0.53596457
=0.9675

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
=989.693 / 908.713
=1.0891

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))
=(29.856 / (29.856 + 173.555)) / (38.979 / (38.979 + 178.119))
=0.14677672 / 0.17954564
=0.8175

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)
=(263.631 / 989.693) / (247.398 / 908.713)
=0.26637654 / 0.27225097
=0.9784

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)
=((352.218 + 173.704) / 1217.301) / ((379.322 + 187.856) / 1235.035)
=0.43203941 / 0.45924043
=0.9408

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
=(54.547 - -1.308 - 113.861) / 1217.301
=-0.0477

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 -2.75 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 1.0361.07551.03911.00220.94441.0470.99761.01640.96890.9875
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 0.9981.00461.13311.01931.03141.0691.01421.03081.04050.9804
LVGI 1.03261.27080.90460.95841.20870.9350.96461.11791.01111.0371
TATA -0.0552-0.0244-0.0019-0.0164-0.0299-0.037-0.0364-0.0214-0.026-0.0436
M-score -2.42-2.33-2.46-2.54-2.54-2.66-2.58-2.53-2.54-2.61

Matthews International Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.99731.0781.03831.02721.05831.12561.08161.00670.98580.8599
GMI 1.00581.02411.04871.05621.04661.03361.02141.02751.03321.0302
AQI 1.01640.98090.99740.99770.96890.99260.99041.01060.98750.9675
SGI 1.09371.08671.06851.04161.001711.02791.05791.09451.0891
DEPI 1.01981.02051.04411.01521.02311.1931.07951.02850.96250.8175
SGAI 1.03081.01110.98590.9971.04051.05531.07071.02740.98040.9784
LVGI 1.11791.12941.11641.08331.01111.0961.11161.05431.03710.9408
TATA -0.0204-0.0104-0.0156-0.0206-0.026-0.0263-0.0325-0.0397-0.0436-0.0477
M-score -2.53-2.42-2.46-2.51-2.54-2.49-2.56-2.61-2.61-2.75
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