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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 -2.59. The lowest was -3.83. And the median was -3.16.
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 * 0.7831||+||0.528 * 0.9916||+||0.404 * 0.1498||+||0.892 * 1.5339||+||0.115 * 0.9885|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0685||+||4.679 * -0.1592||-||0.327 * 0.9652|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $46.4 Mil.|
Revenue was 72.412 + 153.939 + 112.209 + 90.907 = $429.5 Mil.
Gross Profit was 52.317 + 127.9 + 89.901 + 70.087 = $340.2 Mil.
Total Current Assets was $105.2 Mil.
Total Assets was $1,687.4 Mil.
Property, Plant and Equipment(Net PPE) was $1,581.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $157.2 Mil.
Selling, General & Admin. Expense(SGA) was $38.3 Mil.
Total Current Liabilities was $232.2 Mil.
Long-Term Debt was $410.0 Mil.
Net Income was -50.234 + 46.563 + 29.619 + 18.226 = $44.2 Mil.
Non Operating Income was -0.097 + 0 + 0 + 0 = $-0.1 Mil.
Cash Flow from Operations was 93.346 + 71.122 + 66.884 + 81.53 = $312.9 Mil.
|Accounts Receivable was $38.6 Mil.
Revenue was 73.98 + 68.667 + 71.376 + 65.959 = $280.0 Mil.
Gross Profit was 58.623 + 53.689 + 56.248 + 51.368 = $219.9 Mil.
Total Current Assets was $59.0 Mil.
Total Assets was $1,021.7 Mil.
Property, Plant and Equipment(Net PPE) was $959.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $94.2 Mil.
Selling, General & Admin. Expense(SGA) was $23.4 Mil.
Total Current Liabilities was $132.9 Mil.
Long-Term Debt was $270.0 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)|
|=||(46.387 / 429.467)||/||(38.615 / 279.982)|
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)|
|=||(127.9 / 279.982)||/||(52.317 / 429.467)|
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 - (105.193 + 1581.53) / 1687.426)||/||(1 - (58.978 + 959.912) / 1021.731)|
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))|
|=||(94.193 / (94.193 + 959.912))||/||(157.177 / (157.177 + 1581.53))|
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)|
|=||(38.347 / 429.467)||/||(23.396 / 279.982)|
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)|
|=||((410 + 232.198) / 1687.426)||/||((270 + 132.875) / 1021.731)|
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|
|=||(44.174 - -0.097||-||312.882)||/||1687.426|
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 -3.30 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