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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
-2.04 (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 -2.15 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: -2.04

-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 * 1.0562+0.528 * 0.9975+0.404 * 0.6226+0.892 * 1.3235+0.115 * 0.8275
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8138+4.679 * 0.0124-0.327 * 0.7643
=-2.15

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $103.4 Mil.
Revenue was 126.555 + 126.3 + 134.999 + 131.545 = $519.4 Mil.
Gross Profit was 126.648 + 125.516 + 134.098 + 130.361 = $516.6 Mil.
Total Current Assets was $1,252.9 Mil.
Total Assets was $6,095.3 Mil.
Property, Plant and Equipment(Net PPE) was $3,351.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $90.4 Mil.
Selling, General & Admin. Expense(SGA) was $47.1 Mil.
Total Current Liabilities was $173.7 Mil.
Long-Term Debt was $2,728.5 Mil.
Net Income was 70.358 + 53.724 + 57.927 + 58.237 = $240.2 Mil.
Non Operating Income was 3.676 + -8.945 + -38.402 + -34.672 = $-78.3 Mil.
Cash Flow from Operations was 30.999 + 67.954 + 69.336 + 74.812 = $243.1 Mil.
Accounts Receivable was $74.0 Mil.
Revenue was 114.57 + 99.801 + 95.961 + 82.106 = $392.4 Mil.
Gross Profit was 112.843 + 99.271 + 95.61 + 81.656 = $389.4 Mil.
Total Current Assets was $453.4 Mil.
Total Assets was $5,633.3 Mil.
Property, Plant and Equipment(Net PPE) was $2,966.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $65.9 Mil.
Selling, General & Admin. Expense(SGA) was $43.8 Mil.
Total Current Liabilities was $145.5 Mil.
Long-Term Debt was $3,364.1 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)
=(103.413 / 519.399) / (73.976 / 392.438)
=0.19910127 / 0.18850366
=1.0562

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)
=(389.38 / 392.438) / (516.623 / 519.399)
=0.99220769 / 0.99465536
=0.9975

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 - (1252.884 + 3350.953) / 6095.337) / (1 - (453.364 + 2966.106) / 5633.323)
=0.24469525 / 0.39299238
=0.6226

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
=519.399 / 392.438
=1.3235

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))
=(65.908 / (65.908 + 2966.106)) / (90.398 / (90.398 + 3350.953))
=0.02173737 / 0.02626817
=0.8275

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)
=(47.135 / 519.399) / (43.763 / 392.438)
=0.09074912 / 0.1115157
=0.8138

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)
=((2728.549 + 173.718) / 6095.337) / ((3364.119 + 145.482) / 5633.323)
=0.47614545 / 0.62300724
=0.7643

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
=(240.246 - -78.343 - 243.101) / 6095.337
=0.0124

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 -2.15 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 03.50440.58931.20721.87490.86711.1071.03110.765
SGI 1.62051.06510.94731.22491.49731.22411.28871.41391.2246
DEPI 0.79810.72131.1440.85731.0141.3620.81671.14151.0801
SGAI 0.94971.0151.32650.83430.70410.85990.96210.82810.9152
LVGI 1.25040.9080.67071.48131.08281.03921.17330.99990.7857
TATA 0.00950.0013-0.0033-0.01060.01460.0038-0.01020.00830.0462
M-score -1.39-1.61-2.54-2.45-1.86-2.22-2.30-2.03-1.92

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 0.86011.1071.24121.12881.17521.03110.93140.83770.62260.765
SGI 1.29391.28871.31.29271.31641.41391.43381.41481.32351.2246
DEPI 0.88090.81670.88241.0841.24981.14151.07720.88190.82751.0596
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 -0.0074-0.0102-0.0058-0.00050.00110.00820.00930.00880.01240.02
M-score -2.39-2.30-2.14-2.14-2.13-2.03-2.09-2.12-2.15-2.04
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