MGI Research

Sunday, Sep 20th

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MGI Index

Research MethodologyMGI Index | MGI Change Vector | Coverage

small_mgi_index_630944893The MGI Index ("Margin Growth Indicator" or "MGI-X") is a quantitative benchmark that identifies companies that are the most and least efficient managers of growth and profitability. One could thin of MGI Index as the corporate equivalent to a Body Mass Index (BMI) indicator. Companies with bloated cost structures and inefficient business models tend to have low and declining MGI scores, while those that are constantly trimming the corporate "fat" and increasing their efficiency tend to have high and rising MGI scores.

The MGI Index answers the following key questions:

  • How do companies compare vs. their peers?
  • Which management team is the most or least efficient?
  • How well do executives manage costs in both up and down cycles?
  • Is management taking concrete steps to improve results?

MGI Index measures management's effectiveness across key operating areas of the business. MGI uses up to eight years of publicly available financial information derived from SEC filings and management reports. MGI Index models a company's performance and synthesizes short-term, mid-term and long-term operating results into an objective, uniform measure of corporate efficiency. MGI Index takes into account changes in key budget allocation areas such as research and development, sales, marketing, capital spending, general and administrative.  The result is a single number - the MGI Index, a measure of corporate operating fitness.