The composite-system method for analyzing stability of large-scale system is studied focusing on the quadratic-order theorems usingM-matrices. Here, by the term "composite-system method", we refer to the method to decompose a large-scale system into smaller subsystems and to make two-step analysis (i.e., first to analyze subsystems and second to combine the results to reduce the property of the whole). Theories about Lyapunov stability and about input-output stability are described from a unified standpoint and their mutual relation is clarified. As an application, multi-input multi-output systems. The contents are generally useful for stability analysis of large-scale nonlinear systems.