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GuruFocus has detected 6 Warning Signs with Medical Properties Trust Inc $MPW.
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Medical Properties Trust Inc (NYSE:MPW)
Beneish M-Score
-2.11 (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 -2.11 signals that the company is a manipulator.

MPW' s Beneish M-Score Range Over the Past 10 Years
Min: -2.65   Max: 6.03
Current: -2.11

-2.65
6.03

During the past 13 years, the highest Beneish M-Score of Medical Properties Trust Inc was 6.03. The lowest was -2.65. And the median was -2.15.


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 * 1.223+0.528 * 0.9965+0.404 * 0.8182+0.892 * 1.1697+0.115 * 0.9518
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9793+4.679 * 0.0062-0.327 * 0.8227
=-2.11

* 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 $129.9 Mil.
Revenue was 156.397 + 153.283 + 126.555 + 126.3 = $562.5 Mil.
Gross Profit was 155.069 + 152.163 + 126.648 + 125.516 = $559.4 Mil.
Total Current Assets was $638.7 Mil.
Total Assets was $6,780.7 Mil.
Property, Plant and Equipment(Net PPE) was $3,958.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $104.9 Mil.
Selling, General & Admin. Expense(SGA) was $50.6 Mil.
Total Current Liabilities was $213.7 Mil.
Long-Term Debt was $3,278.0 Mil.
Net Income was 67.97 + 43.039 + 70.358 + 53.724 = $235.1 Mil.
Non Operating Income was -33.424 + -27.752 + 3.676 + -8.945 = $-66.4 Mil.
Cash Flow from Operations was 64.271 + 96.394 + 30.999 + 67.954 = $259.6 Mil.
Accounts Receivable was $90.8 Mil.
Revenue was 134.999 + 131.545 + 114.57 + 99.801 = $480.9 Mil.
Gross Profit was 134.098 + 130.361 + 112.843 + 99.271 = $476.6 Mil.
Total Current Assets was $347.7 Mil.
Total Assets was $5,710.4 Mil.
Property, Plant and Equipment(Net PPE) was $3,115.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $78.4 Mil.
Selling, General & Admin. Expense(SGA) was $44.2 Mil.
Total Current Liabilities was $161.0 Mil.
Long-Term Debt was $3,413.2 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)
=(129.879 / 562.535) / (90.791 / 480.915)
=0.23088163 / 0.18878804
=1.223

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)
=(476.573 / 480.915) / (559.396 / 562.535)
=0.99097138 / 0.9944199
=0.9965

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 - (638.739 + 3958.945) / 6780.73) / (1 - (347.668 + 3115.737) / 5710.395)
=0.32194852 / 0.39349117
=0.8182

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
=562.535 / 480.915
=1.1697

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))
=(78.447 / (78.447 + 3115.737)) / (104.861 / (104.861 + 3958.945))
=0.02455932 / 0.02580364
=0.9518

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)
=(50.637 / 562.535) / (44.205 / 480.915)
=0.09001573 / 0.09191853
=0.9793

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)
=((3277.986 + 213.722) / 6780.73) / ((3413.219 + 161.028) / 5710.395)
=0.51494574 / 0.6259194
=0.8227

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
=(235.091 - -66.445 - 259.618) / 6780.73
=0.0062

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 -2.11 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 03.50440.58931.20721.87490.86711.1071.03110.8581
SGI 1.62051.06510.94731.22491.49731.22411.28871.41391.2246
DEPI 0.79810.72131.1440.85731.0141.3620.81671.14150.9778
SGAI 0.94971.0151.32650.83430.70410.85990.96210.82810.9152
LVGI 1.25040.9080.67071.48131.08281.03921.17330.99990.7857
TATA 0.00950.0013-0.0033-0.01060.01460.0038-0.01170.00830.005
M-score -1.39-1.61-2.54-2.45-1.86-2.22-2.31-2.03-2.08

Medical Properties Trust Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.00121.01861.04150.99630.98270.99580.98431.05621.16151.223
GMI 0.99580.99360.998111.00271.00471.00340.99750.99640.9965
AQI 1.1071.24121.12881.17521.03110.93140.83770.62260.85810.8182
SGI 1.28871.31.29271.31641.41391.43381.41481.32351.22461.1697
DEPI 0.81670.88241.0841.24981.14151.07720.88190.82750.97780.9518
SGAI 0.96210.96520.99610.9570.8280.78610.77380.81380.91520.9793
LVGI 1.17331.01691.0431.13780.99991.18530.99870.76430.78570.8227
TATA -0.0117-0.0073-0.00180.00010.00820.00930.00880.01240.0050.0062
M-score -2.31-2.15-2.14-2.14-2.03-2.09-2.12-2.15-2.08-2.11
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