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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.
During the past 6 years, the highest Beneish M-Score of Matador Resources Co was -2.55. The lowest was -4.35. And the median was -3.27.
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 Matador Resources Co 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 * 0.9019||+||0.528 * 0.9153||+||0.404 * 2.8374||+||0.892 * 1.1651||+||0.115 * 0.6131|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3498||+||4.679 * -0.5152||-||0.327 * 1.3485|
|This Year (Sep15) TTM:||Last Year (Sep14) TTM:|
|Accounts Receivable was $46.5 Mil.|
Revenue was 98.41 + 78.096 + 72.412 + 153.939 = $402.9 Mil.
Gross Profit was 83.493 + 78.096 + 72.412 + 188.686 = $422.7 Mil.
Total Current Assets was $126.5 Mil.
Total Assets was $1,280.5 Mil.
Property, Plant and Equipment(Net PPE) was $1,142.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $187.2 Mil.
Selling, General & Admin. Expense(SGA) was $47.3 Mil.
Total Current Liabilities was $153.3 Mil.
Long-Term Debt was $391.0 Mil.
Net Income was -242.059 + -157.091 + -50.234 + 46.563 = $-402.8 Mil.
Non Operating Income was 0 + 0 + -0.097 + 0 = $-0.1 Mil.
Cash Flow from Operations was 72.534 + 20.044 + 93.346 + 71.122 = $257.0 Mil.
|Accounts Receivable was $44.3 Mil.
Revenue was 112.209 + 90.907 + 73.98 + 68.667 = $345.8 Mil.
Gross Profit was 98.518 + 90.907 + 73.98 + 68.667 = $332.1 Mil.
Total Current Assets was $59.1 Mil.
Total Assets was $1,277.4 Mil.
Property, Plant and Equipment(Net PPE) was $1,214.2 Mil.
Depreciation, Depletion and Amortization(DDA) was $114.8 Mil.
Selling, General & Admin. Expense(SGA) was $30.1 Mil.
Total Current Liabilities was $152.6 Mil.
Long-Term Debt was $250.0 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(46.53 / 402.857)||/||(44.279 / 345.763)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(78.096 / 345.763)||/||(83.493 / 402.857)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (126.54 + 1142.047) / 1280.522)||/||(1 - (59.055 + 1214.152) / 1277.403)|
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.
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))|
|=||(114.772 / (114.772 + 1214.152))||/||(187.244 / (187.244 + 1142.047))|
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)|
|=||(47.26 / 402.857)||/||(30.051 / 345.763)|
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)|
|=||((390.959 + 153.281) / 1280.522)||/||((250 + 152.62) / 1277.403)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-402.821 - -0.097||-||257.046)||/||1280.522|
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.
Matador Resources Co has a M-score of -4.35 suggests that the company will not be a manipulator.
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
Matador Resources Co Annual Data
Matador Resources Co Quarterly Data