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GuruFocus has detected 5 Warning Signs with Mattersight Corp $MATR.
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Mattersight Corp (NAS:MATR)
Beneish M-Score
-2.42 (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.

Mattersight Corp has a M-score of -2.42 suggests that the company is not a manipulator.

MATR' s Beneish M-Score Range Over the Past 10 Years
Min: -7.62   Max: 1.63
Current: -2.42

-7.62
1.63

During the past 13 years, the highest Beneish M-Score of Mattersight Corp was 1.63. The lowest was -7.62. And the median was -3.19.


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 Mattersight Corp 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 * 1.2718+0.528 * 1.0681+0.404 * 1.3458+0.892 * 1.0579+0.115 * 1.0507
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9594+4.679 * -0.0821-0.327 * 1.1534
=-2.42

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $9.57 Mil.
Revenue was 10.959 + 12.558 + 10.412 + 9.074 = $43.00 Mil.
Gross Profit was 7.52 + 8.654 + 6.969 + 5.879 = $29.02 Mil.
Total Current Assets was $37.83 Mil.
Total Assets was $58.53 Mil.
Property, Plant and Equipment(Net PPE) was $10.81 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.09 Mil.
Selling, General & Admin. Expense(SGA) was $27.62 Mil.
Total Current Liabilities was $19.81 Mil.
Long-Term Debt was $21.16 Mil.
Net Income was -4.952 + -3.118 + -5.838 + -6.2 = $-20.11 Mil.
Non Operating Income was 0.107 + 0.117 + 0.066 + 0 = $0.29 Mil.
Cash Flow from Operations was -3.188 + 0.312 + -7.485 + -5.23 = $-15.59 Mil.
Accounts Receivable was $7.11 Mil.
Revenue was 10.053 + 10.372 + 10.482 + 9.742 = $40.65 Mil.
Gross Profit was 6.807 + 7.479 + 7.943 + 7.073 = $29.30 Mil.
Total Current Assets was $36.88 Mil.
Total Assets was $52.21 Mil.
Property, Plant and Equipment(Net PPE) was $8.77 Mil.
Depreciation, Depletion and Amortization(DDA) was $5.35 Mil.
Selling, General & Admin. Expense(SGA) was $27.22 Mil.
Total Current Liabilities was $23.80 Mil.
Long-Term Debt was $7.88 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)
=(9.565 / 43.003) / (7.109 / 40.649)
=0.22242634 / 0.17488745
=1.2718

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)
=(29.302 / 40.649) / (29.022 / 43.003)
=0.72085414 / 0.67488315
=1.0681

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 - (37.827 + 10.81) / 58.533) / (1 - (36.88 + 8.773) / 52.212)
=0.16906702 / 0.12562246
=1.3458

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
=43.003 / 40.649
=1.0579

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))
=(5.347 / (5.347 + 8.773)) / (6.091 / (6.091 + 10.81))
=0.37868272 / 0.36039288
=1.0507

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)
=(27.624 / 43.003) / (27.218 / 40.649)
=0.64237379 / 0.66958597
=0.9594

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)
=((21.158 + 19.805) / 58.533) / ((7.881 + 23.799) / 52.212)
=0.69982745 / 0.60675707
=1.1534

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
=(-20.108 - 0.29 - -15.591) / 58.533
=-0.0821

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.

Mattersight Corp has a M-score of -2.42 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.

Mattersight Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.77720.98940.83540.60061.5860.86870.87931.63240.96681.9865
GMI 0.60061.0121.02730.62620.89140.88320.89210.98550.94191.0893
AQI 1.1290.94791.27820.46041.64091.31451.18940.82381.07961.3324
SGI 1.13670.89321.11420.30390.9421.16391.01860.8791.31641.0547
DEPI 1.03520.83170.94170.9570.98841.0411.04951.01441.08870.9581
SGAI 1.65611.03590.73152.63321.0450.95860.59911.23920.90671.0679
LVGI 1.37981.00221.17871.40590.56131.19031.06061.05370.74372.1375
TATA -0.335-0.3148-0.2599-0.15570.7035-0.1348-0.4097-0.2237-0.2303-0.0743
M-score -4.52-4.10-3.64-5.031.64-3.07-4.42-3.19-3.19-2.08

Mattersight Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.63241.84362.4041.14710.96681.28210.78371.34931.98651.2718
GMI 0.98550.97910.98010.96680.94190.9731.01021.07081.08931.0681
AQI 0.82380.90721.01851.05591.07960.6230.85061.44561.33241.3458
SGI 0.8790.99131.08481.20851.31641.24611.14151.05511.05471.0579
DEPI 1.01441.01141.16071.07781.08871.04660.88210.98560.95811.0507
SGAI 1.23921.08191.26971.50480.90671.09781.16431.16971.06790.9594
LVGI 1.05371.3161.06280.81370.74370.97120.95122.07682.13751.1534
TATA -0.2237-0.1863-0.1828-0.1741-0.2303-0.2012-0.211-0.0136-0.0743-0.0821
M-score -3.19-2.75-2.02-2.99-3.19-3.11-3.62-2.34-2.08-2.42
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