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GuruFocus has detected 3 Warning Signs with Matador Resources Co $MTDR.
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Matador Resources Co (NYSE:MTDR)
Beneish M-Score
-3.78 (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.

Matador Resources Co has a M-score of -5.24 suggests that the company is not a manipulator.

MTDR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.78   Max: 10000000
Current: -3.78

-3.78
10000000

During the past 8 years, the highest Beneish M-Score of Matador Resources Co was 10000000.00. The lowest was -3.78. And the median was -2.88.


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 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 * 1.187+0.528 * 1.2896+0.404 * 0.0882+0.892 * 0.6046+0.115 * 1.3701
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7878+4.679 * -0.4708-0.327 * 1.2163
=-5.24

* 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 USD 33.4 Mil.
Revenue was 88.733 + 45.176 + 44.15 + 65.867 = USD 243.9 Mil.
Gross Profit was 60.291 + 21.446 + 20.759 + 41.785 = USD 144.3 Mil.
Total Current Assets was USD 81.0 Mil.
Total Assets was USD 1,177.7 Mil.
Property, Plant and Equipment(Net PPE) was USD 1,095.7 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 125.6 Mil.
Selling, General & Admin. Expense(SGA) was USD 51.1 Mil.
Total Current Liabilities was USD 151.6 Mil.
Long-Term Debt was USD 457.2 Mil.
Net Income was 11.931 + -105.853 + -107.654 + -230.401 = USD -432.0 Mil.
Non Operating Income was 0.932 + 1.002 + 1.065 + 0.368 = USD 3.4 Mil.
Cash Flow from Operations was 46.862 + 31.242 + 18.358 + 22.611 = USD 119.1 Mil.
Accounts Receivable was USD 46.5 Mil.
Revenue was 98.979 + 78.096 + 72.412 + 153.939 = USD 403.4 Mil.
Gross Profit was 74.637 + 52.888 + 52.317 + 127.9 = USD 307.7 Mil.
Total Current Assets was USD 126.5 Mil.
Total Assets was USD 1,280.5 Mil.
Property, Plant and Equipment(Net PPE) was USD 1,142.0 Mil.
Depreciation, Depletion and Amortization(DDA) was USD 187.2 Mil.
Selling, General & Admin. Expense(SGA) was USD 47.3 Mil.
Total Current Liabilities was USD 153.3 Mil.
Long-Term Debt was USD 391.0 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)
=(33.396 / 243.926) / (46.53 / 403.426)
=0.13691037 / 0.11533714
=1.187

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)
=(307.742 / 403.426) / (144.281 / 243.926)
=0.76282143 / 0.59149496
=1.2896

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 - (81.02 + 1095.705) / 1177.693) / (1 - (126.54 + 1142.047) / 1280.522)
=0.00082195 / 0.00932042
=0.0882

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
=243.926 / 403.426
=0.6046

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))
=(187.244 / (187.244 + 1142.047)) / (125.555 / (125.555 + 1095.705))
=0.14086005 / 0.10280776
=1.3701

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)
=(51.088 / 243.926) / (47.26 / 403.426)
=0.20944057 / 0.11714664
=1.7878

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)
=((457.153 + 151.629) / 1177.693) / ((390.959 + 153.281) / 1280.522)
=0.51692759 / 0.42501417
=1.2163

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
=(-431.977 - 3.367 - 119.073) / 1177.693
=-0.4708

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 -5.24 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 local exchange's currency.

Matador Resources Co Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.60621.07510.67940.85981.34561.0587
GMI 0.99951.09320.98380.95931.14261.1643
AQI 2623.07310.57290.408501.14320890283E+130.5153
SGI 1.86542.08411.57971.65220.73350.8363
DEPI 0.66360.61411.14971.12670.6161.6072
SGAI 0.74010.5210.90450.93652.12461.3146
LVGI 2.32571.05420.86490.99251.38271.0966
TATA -0.1639-0.2484-0.1507-0.0981-0.7794-0.2313
M-score 1,056.05-2.71-3.13-2.884,618,563,967,409.09-3.78

Matador Resources Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.170.85980.78310.98670.90061.34911.19650.82431.1871.0616
GMI 0.96050.95930.99161.00951.03241.14391.19651.24221.28961.1662
AQI 0.796300.14980.11922.83741.14320890283E+132.90932.95610.08820.5153
SGI 1.41631.65221.53391.36641.16680.73160.66850.610.60460.8341
DEPI 1.3911.12670.98850.81290.61310.6160.6450.89421.37011.6072
SGAI 1.22170.93661.06851.15631.34792.13011.94491.90051.78781.3181
LVGI 1.08620.99250.96521.3461.34851.38271.15321.36021.21631.0966
TATA -0.1198-0.0981-0.1592-0.2451-0.5157-0.7794-0.7497-0.7676-0.4708-0.2312
M-score -2.64-2.88-3.30-3.82-4.294,618,563,967,409.09-5.48-5.95-5.24-3.78
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