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GuruFocus has detected 5 Warning Signs with Mettler-Toledo International Inc $MTD.
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Mettler-Toledo International Inc (NYSE:MTD)
Beneish M-Score
-2.52 (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.

Mettler-Toledo International Inc has a M-score of -2.52 suggests that the company is not a manipulator.

MTD' s Beneish M-Score Range Over the Past 10 Years
Min: -8.07   Max: 0.84
Current: -2.52

-8.07
0.84

During the past 13 years, the highest Beneish M-Score of Mettler-Toledo International Inc was 0.84. The lowest was -8.07. And the median was -2.54.


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 Mettler-Toledo International 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 * 1.0621+0.528 * 0.9776+0.404 * 1.026+0.892 * 1.0682+0.115 * 1.0098
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0049+4.679 * -0.0245-0.327 * 1.1334
=-2.52

* 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 $439 Mil.
Revenue was 594.567 + 709.699 + 650.598 + 608.286 = $2,563 Mil.
Gross Profit was 342.9 + 418.61 + 369.494 + 347.576 = $1,479 Mil.
Total Current Assets was $913 Mil.
Total Assets was $2,204 Mil.
Property, Plant and Equipment(Net PPE) was $572 Mil.
Depreciation, Depletion and Amortization(DDA) was $70 Mil.
Selling, General & Admin. Expense(SGA) was $748 Mil.
Total Current Liabilities was $561 Mil.
Long-Term Debt was $944 Mil.
Net Income was 92.466 + 137.776 + 101.332 + 79.588 = $411 Mil.
Non Operating Income was 4.298 + -1.655 + -2.097 + -10.378 = $-10 Mil.
Cash Flow from Operations was 67.599 + 152.931 + 138.922 + 115.525 = $475 Mil.
Accounts Receivable was $387 Mil.
Revenue was 539.674 + 673.535 + 604.154 + 582.057 = $2,399 Mil.
Gross Profit was 299.907 + 390.747 + 339.529 + 322.912 = $1,353 Mil.
Total Current Assets was $867 Mil.
Total Assets was $2,035 Mil.
Property, Plant and Equipment(Net PPE) was $521 Mil.
Depreciation, Depletion and Amortization(DDA) was $65 Mil.
Selling, General & Admin. Expense(SGA) was $697 Mil.
Total Current Liabilities was $545 Mil.
Long-Term Debt was $682 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)
=(439.413 / 2563.15) / (387.296 / 2399.42)
=0.17143476 / 0.16141234
=1.0621

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)
=(1353.095 / 2399.42) / (1478.58 / 2563.15)
=0.56392587 / 0.5768605
=0.9776

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 - (912.865 + 572.058) / 2203.764) / (1 - (866.699 + 521.496) / 2035.273)
=0.32618783 / 0.3179318
=1.026

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
=2563.15 / 2399.42
=1.0682

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))
=(64.755 / (64.755 + 521.496)) / (70.26 / (70.26 + 572.058))
=0.1104561 / 0.10938507
=1.0098

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)
=(747.873 / 2563.15) / (696.693 / 2399.42)
=0.29177887 / 0.29035892
=1.0049

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)
=((944.211 + 561.162) / 2203.764) / ((681.872 + 544.792) / 2035.273)
=0.68309175 / 0.60270244
=1.1334

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
=(411.162 - -9.832 - 474.977) / 2203.764
=-0.0245

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.

Mettler-Toledo International Inc has a M-score of -2.52 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.

Mettler-Toledo International Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.02740.89371.02481.03540.98211.01461.05020.89330.98011.0562
GMI 0.9920.99280.97830.97610.99890.99530.98350.9860.96840.9861
AQI 1.02430.9571.03530.77011.03731.0520.90990.95880.98031.0306
SGI 1.12471.10010.87611.13841.17331.01391.0161.0450.96361.0471
DEPI 1.05781.09311.0511.06481.01071.03081.0110.94520.99271.0129
SGAI 0.97670.99610.99451.02371.01860.95880.99691.00640.99820.9984
LVGI 1.07881.05350.77711.30730.92850.87141.0381.13241.14981.1624
TATA -0.0301-0.00720.6902-0.0228-0.0194-0.0309-0.0171-0.0381-0.0371-0.0203
M-score -2.49-2.550.74-2.63-2.40-2.53-2.56-2.79-2.78-2.53

Mettler-Toledo International Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.89330.87540.93790.97150.98011.04311.02161.0391.05621.0621
GMI 0.9860.97510.97050.96690.96840.97950.97930.9840.98610.9776
AQI 0.95880.96620.92060.95410.98030.96590.99421.02891.03061.026
SGI 1.0451.02741.00370.97840.96360.9710.99241.02181.04711.0682
DEPI 0.94520.95540.98370.98930.99270.99610.95910.98091.01291.0098
SGAI 1.00641.01591.01411.0060.99820.98360.99170.99470.99841.0049
LVGI 1.13241.181.22841.20731.14981.13741.10271.11941.16241.1334
TATA -0.0381-0.0443-0.0389-0.0364-0.0371-0.024-0.0235-0.0222-0.0203-0.0245
M-score -2.79-2.87-2.84-2.80-2.78-2.65-2.63-2.57-2.53-2.52
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