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Matthews International Corporation (NAS:MATW)
Beneish M-Score
-2.07 (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 -2.07 signals that the company is a manipulator.

MATW' s 10-Year Beneish M-Score Range
Min: -3.3   Max: -2.03
Current: -2.07

-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 * 1.2604+0.528 * 1.0126+0.404 * 1.1928+0.892 * 1.2329+0.115 * 0.9335
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0519+4.679 * -0.0171-0.327 * 1.0883
=-2.07

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $268 Mil.
Revenue was 343.584 + 349.832 + 279.983 + 246.837 = $1,220 Mil.
Gross Profit was 124.67 + 116.708 + 104.23 + 90.18 = $436 Mil.
Total Current Assets was $546 Mil.
Total Assets was $1,971 Mil.
Property, Plant and Equipment(Net PPE) was $206 Mil.
Depreciation, Depletion and Amortization(DDA) was $49 Mil.
Selling, General & Admin. Expense(SGA) was $342 Mil.
Total Current Liabilities was $221 Mil.
Long-Term Debt was $705 Mil.
Net Income was 14.951 + 5.164 + 19.263 + 11.333 = $51 Mil.
Non Operating Income was -0.164 + -3.544 + -0.441 + -0.79 = $-5 Mil.
Cash Flow from Operations was 9.292 + 28.852 + 39.939 + 11.336 = $89 Mil.
Accounts Receivable was $172 Mil.
Revenue was 229.945 + 252.706 + 250.652 + 256.39 = $990 Mil.
Gross Profit was 81.376 + 90.287 + 91.391 + 94.866 = $358 Mil.
Total Current Assets was $408 Mil.
Total Assets was $1,217 Mil.
Property, Plant and Equipment(Net PPE) was $178 Mil.
Depreciation, Depletion and Amortization(DDA) was $39 Mil.
Selling, General & Admin. Expense(SGA) was $264 Mil.
Total Current Liabilities was $174 Mil.
Long-Term Debt was $352 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)
=(267.571 / 1220.236) / (172.182 / 989.693)
=0.21927807 / 0.17397516
=1.2604

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)
=(116.708 / 989.693) / (124.67 / 1220.236)
=0.3616475 / 0.35713419
=1.0126

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 - (546.266 + 205.889) / 1971.472) / (1 - (407.971 + 178.119) / 1217.301)
=0.61848051 / 0.51853321
=1.1928

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
=1220.236 / 989.693
=1.2329

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))
=(38.979 / (38.979 + 178.119)) / (49.028 / (49.028 + 205.889))
=0.17954564 / 0.19232927
=0.9335

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)
=(342.308 / 1220.236) / (263.948 / 989.693)
=0.28052606 / 0.26669684
=1.0519

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)
=((705.481 + 221.452) / 1971.472) / ((352.218 + 173.704) / 1217.301)
=0.47017305 / 0.43203941
=1.0883

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
=(50.711 - -4.939 - 89.419) / 1971.472
=-0.0171

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 -2.07 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 1.04860.94320.94851.10021.00241.0330.99731.05830.92931.4173
GMI 1.09220.91791.01490.94871.04510.95931.00581.04661.03321.0201
AQI 1.07551.03911.00220.94441.0470.99761.01640.96890.98671.1894
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 1.27080.90460.95841.20870.9350.96461.11791.01111.04361.0743
TATA -0.0244-0.0019-0.0164-0.0299-0.037-0.0364-0.0214-0.026-0.0417-0.0218
M-score -2.33-2.46-2.54-2.54-2.66-2.58-2.53-2.54-2.66-2.03

Matthews International Corporation Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.05831.12561.08161.00670.92930.85990.95881.03711.41731.2604
GMI 1.04661.03361.02141.02751.03321.03021.02981.00941.02011.0126
AQI 0.96890.99260.99041.01060.98670.96750.96070.92941.18941.1928
SGI 1.001711.02791.05791.09451.08911.04321.04851.1231.2329
DEPI 1.02311.1931.07951.02850.96250.81750.85920.90561.01910.9335
SGAI 1.04051.05531.07071.02740.98040.97960.97971.01521.05841.0519
LVGI 1.01111.0961.11161.05431.04360.94080.93170.96281.07431.0883
TATA -0.026-0.0263-0.0298-0.0402-0.041-0.0461-0.0392-0.0349-0.0217-0.0171
M-score -2.54-2.49-2.55-2.61-2.66-2.74-2.65-2.59-2.03-2.07
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