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GuruFocus has detected 5 Warning Signs with Medical Properties Trust Inc $MPW.
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Medical Properties Trust Inc (NYSE:MPW)
Beneish M-Score
-2.08 (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.

Medical Properties Trust Inc has a M-score of -2.08 signals that the company is a manipulator.

MPW' s Beneish M-Score Range Over the Past 10 Years
Min: -2.59   Max: 6.03
Current: -2.08

-2.59
6.03

During the past 13 years, the highest Beneish M-Score of Medical Properties Trust Inc was 6.03. The lowest was -2.59. And the median was -2.03.


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 Medical Properties Trust Inc 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 * 1.1615+0.528 * 0.9964+0.404 * 0.8581+0.892 * 1.2246+0.115 * 0.9778
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9152+4.679 * 0.005-0.327 * 0.7857
=-2.08

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $116.9 Mil.
Revenue was 153.283 + 126.555 + 126.3 + 134.999 = $541.1 Mil.
Gross Profit was 152.163 + 126.648 + 125.516 + 134.098 = $538.4 Mil.
Total Current Assets was $257.8 Mil.
Total Assets was $6,418.5 Mil.
Property, Plant and Equipment(Net PPE) was $3,728.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $97.6 Mil.
Selling, General & Admin. Expense(SGA) was $48.9 Mil.
Total Current Liabilities was $227.6 Mil.
Long-Term Debt was $2,909.3 Mil.
Net Income was 43.039 + 70.358 + 53.724 + 57.927 = $225.0 Mil.
Non Operating Income was -27.752 + 3.676 + -8.945 + -38.402 = $-71.4 Mil.
Cash Flow from Operations was 96.394 + 30.999 + 67.954 + 69.336 = $264.7 Mil.
Accounts Receivable was $82.2 Mil.
Revenue was 131.545 + 114.57 + 99.801 + 95.961 = $441.9 Mil.
Gross Profit was 130.361 + 112.843 + 99.271 + 95.61 = $438.1 Mil.
Total Current Assets was $324.6 Mil.
Total Assets was $5,609.4 Mil.
Property, Plant and Equipment(Net PPE) was $2,808.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $71.8 Mil.
Selling, General & Admin. Expense(SGA) was $43.6 Mil.
Total Current Liabilities was $166.7 Mil.
Long-Term Debt was $3,322.5 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)
=(116.861 / 541.137) / (82.155 / 441.877)
=0.21595455 / 0.18592278
=1.1615

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)
=(438.085 / 441.877) / (538.425 / 541.137)
=0.99141843 / 0.99498833
=0.9964

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 - (257.799 + 3728.904) / 6418.536) / (1 - (324.635 + 2808.08) / 5609.351)
=0.37887658 / 0.44151917
=0.8581

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
=541.137 / 441.877
=1.2246

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))
=(71.827 / (71.827 + 2808.08)) / (97.601 / (97.601 + 3728.904))
=0.02494074 / 0.02550657
=0.9778

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)
=(48.911 / 541.137) / (43.639 / 441.877)
=0.09038561 / 0.09875825
=0.9152

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)
=((2909.341 + 227.644) / 6418.536) / ((3322.541 + 166.714) / 5609.351)
=0.4887384 / 0.62204255
=0.7857

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
=(225.048 - -71.423 - 264.683) / 6418.536
=0.005

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.

Medical Properties Trust Inc has a M-score of -2.08 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 local exchange's currency.

Medical Properties Trust Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 2.65740.78731.10830.95980.70461.0441.00120.98271.1615
GMI 00.99351.00750.96471.0021.00270.99581.00270.9964
AQI 03.50440.58931.20721.87490.86711.1071.03110.8581
SGI 1.62051.06510.94731.22491.49731.22411.28871.41391.2246
DEPI 0.79810.72131.1440.85731.0141.3620.81671.14150.9778
SGAI 0.94971.0151.32650.83430.70410.85990.96210.82810.9152
LVGI 1.25040.9080.67071.48131.08281.03921.17330.99990.7857
TATA 0.00950.0013-0.0033-0.01060.01460.0038-0.01170.00810.005
M-score -1.39-1.61-2.54-2.45-1.86-2.22-2.31-2.03-2.08

Medical Properties Trust Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.98531.00121.01861.04150.99630.98270.99580.98431.05621.1615
GMI 0.99930.99580.99360.998111.00271.00471.00340.99750.9964
AQI 0.86011.1071.24121.12881.17521.03110.93140.83770.62260.8581
SGI 1.29391.28871.31.29271.31641.41391.43381.41481.32351.2246
DEPI 0.88090.81670.88241.0841.24981.14151.07720.88190.82750.9778
SGAI 0.94590.96210.96520.99610.9570.8280.78610.77380.81380.9152
LVGI 1.18531.17331.01691.0431.13780.99991.18530.99870.76430.7857
TATA -0.0074-0.0117-0.0073-0.00180.00010.00810.00920.00870.01230.005
M-score -2.39-2.31-2.15-2.14-2.14-2.03-2.09-2.12-2.15-2.08
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