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Enbridge Energy Partners LP (NYSE:EEP)
Beneish M-Score
-3.12 (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.

Enbridge Energy Partners LP has a M-score of -3.12 suggests that the company is not a manipulator.

EEP' s 10-Year Beneish M-Score Range
Min: -3.28   Max: 2.72
Current: -3.12

-3.28
2.72

During the past 13 years, the highest Beneish M-Score of Enbridge Energy Partners LP was 2.72. The lowest was -3.28. 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 Enbridge Energy Partners LP 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 * 0.4641+0.528 * 1.0882+0.404 * 0.8764+0.892 * 1.1494+0.115 * 1.061
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9831+4.679 * -0.0571-0.327 * 1.0525
=-3.12

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $235 Mil.
Revenue was 1871.1 + 2079.6 + 1962 + 1789.4 = $7,702 Mil.
Gross Profit was 518.9 + 535.5 + 472.9 + 488.3 = $2,016 Mil.
Total Current Assets was $842 Mil.
Total Assets was $16,063 Mil.
Property, Plant and Equipment(Net PPE) was $14,207 Mil.
Depreciation, Depletion and Amortization(DDA) was $417 Mil.
Selling, General & Admin. Expense(SGA) was $974 Mil.
Total Current Liabilities was $1,824 Mil.
Long-Term Debt was $5,983 Mil.
Net Income was 43.9 + 93.3 + -16.8 + 14.9 = $135 Mil.
Non Operating Income was 13.8 + 19.9 + -85.3 + 9.7 = $-42 Mil.
Cash Flow from Operations was 148.8 + 210.8 + 269.9 + 465 = $1,095 Mil.
Accounts Receivable was $441 Mil.
Revenue was 1672.7 + 1693 + 1771.2 + 1564.3 = $6,701 Mil.
Gross Profit was 522.8 + 289.5 + 483.4 + 612.6 = $1,908 Mil.
Total Current Assets was $709 Mil.
Total Assets was $13,301 Mil.
Property, Plant and Equipment(Net PPE) was $11,634 Mil.
Depreciation, Depletion and Amortization(DDA) was $363 Mil.
Selling, General & Admin. Expense(SGA) was $862 Mil.
Total Current Liabilities was $1,365 Mil.
Long-Term Debt was $4,777 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)
=(235.2 / 7702.1) / (440.9 / 6701.2)
=0.03053713 / 0.06579419
=0.4641

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)
=(535.5 / 6701.2) / (518.9 / 7702.1)
=0.28476989 / 0.26169486
=1.0882

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 - (842 + 14207.1) / 16063.4) / (1 - (709.1 + 11633.6) / 13301)
=0.06314354 / 0.07204721
=0.8764

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
=7702.1 / 6701.2
=1.1494

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))
=(363.1 / (363.1 + 11633.6)) / (417.2 / (417.2 + 14207.1))
=0.03026666 / 0.02852786
=1.061

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)
=(973.8 / 7702.1) / (861.8 / 6701.2)
=0.12643305 / 0.12860383
=0.9831

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)
=((5982.7 + 1824.3) / 16063.4) / ((4777.1 + 1364.6) / 13301)
=0.48601168 / 0.46174724
=1.0525

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
=(135.3 - -41.9 - 1094.5) / 16063.4
=-0.0571

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.

Enbridge Energy Partners LP has a M-score of -3.12 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 own currency.

Enbridge Energy Partners LP Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.14271.04980.91021.05630.61091.61051.07680.7381.31020.3825
GMI 1.07811.49260.72391.080.9580.53141.86990.59140.71911.2507
AQI 0.86070.86140.90960.73350.99870.8181.24190.96871.12111.1667
SGI 1.35291.50921.0051.11891.35920.5791.34971.17760.73611.0613
DEPI 0.91410.96811.25871.17850.90010.95370.97011.00041.1371.0684
SGAI 0.95660.791.11081.06410.8691.83870.7821.03851.64171.0452
LVGI 1.04341.06420.9671.03080.90530.99891.14030.94170.96120.8148
TATA -0.0256-0.0454-0.0087-0.0315-0.0171-0.0473-0.0569-0.0377-0.0272-0.0771
M-score -2.19-1.98-2.76-2.54-2.58-2.99-1.82-2.95-2.74-3.09

Enbridge Energy Partners LP Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.72120.75980.93361.31021.34040.88870.36570.38250.33060.4641
GMI 0.58920.50140.59210.70820.81140.92741.21921.25071.07371.0882
AQI 0.98791.05221.01641.12111.1391.25271.28461.16671.06850.8764
SGI 1.06750.89690.7620.73610.76150.8570.98781.06131.14041.1494
DEPI 1.0871.15521.14041.1371.10611.06811.0751.06841.07721.061
SGAI 1.12641.34021.55271.64171.51911.30031.1431.04520.99770.9831
LVGI 0.94580.95480.9360.96121.0080.78260.82210.81480.77871.0525
TATA -0.0389-0.0319-0.0365-0.0272-0.0373-0.0528-0.0736-0.0771-0.0644-0.0571
M-score -3.07-3.21-3.19-2.74-2.68-2.87-3.15-3.09-3.12-3.12
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