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Enbridge Energy Partners LP (NYSE:EEP)
Beneish M-Score
-3.09 (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 -3.09 suggests that the company is not a manipulator.

EEP' s 10-Year Beneish M-Score Range
Min: -3.09   Max: 1.51
Current: -3.09

-3.09
1.51

During the past 13 years, the highest Beneish M-Score of Enbridge Energy Partners LP was 1.51. The lowest was -3.09. 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 * 0.3825+0.528 * 1.2507+0.404 * 1.1667+0.892 * 1.0613+0.115 * 1.0684
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0452+4.679 * -0.076-0.327 * 0.8148
=-3.09

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $300 Mil.
Revenue was 1962 + 1789.4 + 1672.7 + 1693 = $7,117 Mil.
Gross Profit was 472.9 + 488.3 + 522.8 + 289.5 = $1,774 Mil.
Total Current Assets was $677 Mil.
Total Assets was $14,902 Mil.
Property, Plant and Equipment(Net PPE) was $13,177 Mil.
Depreciation, Depletion and Amortization(DDA) was $388 Mil.
Selling, General & Admin. Expense(SGA) was $945 Mil.
Total Current Liabilities was $1,993 Mil.
Long-Term Debt was $4,777 Mil.
Net Income was -16.8 + 14.9 + 89.9 + -83.3 = $5 Mil.
Non Operating Income was -85.3 + 9.7 + -8.4 + 8.1 = $-76 Mil.
Cash Flow from Operations was 269.9 + 465 + 271.6 + 205.9 = $1,212 Mil.
Accounts Receivable was $739 Mil.
Revenue was 1771.2 + 1564.3 + 1551.1 + 1819.5 = $6,706 Mil.
Gross Profit was 483.4 + 612.6 + 515.8 + 478.2 = $2,090 Mil.
Total Current Assets was $1,088 Mil.
Total Assets was $12,797 Mil.
Property, Plant and Equipment(Net PPE) was $10,938 Mil.
Depreciation, Depletion and Amortization(DDA) was $345 Mil.
Selling, General & Admin. Expense(SGA) was $852 Mil.
Total Current Liabilities was $1,634 Mil.
Long-Term Debt was $5,502 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)
=(300.1 / 7117.1) / (739.3 / 6706.1)
=0.04216605 / 0.11024291
=0.3825

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)
=(488.3 / 6706.1) / (472.9 / 7117.1)
=0.31165655 / 0.24918857
=1.2507

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 - (676.8 + 13176.8) / 14901.5) / (1 - (1087.9 + 10937.6) / 12796.8)
=0.07032178 / 0.06027288
=1.1667

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
=7117.1 / 6706.1
=1.0613

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))
=(344.8 / (344.8 + 10937.6)) / (388 / (388 + 13176.8))
=0.03056087 / 0.02860344
=1.0684

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)
=(945.1 / 7117.1) / (852 / 6706.1)
=0.13279285 / 0.12704851
=1.0452

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)
=((4777.4 + 1993.4) / 14901.5) / ((5501.7 + 1634) / 12796.8)
=0.45437037 / 0.55761597
=0.8148

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
=(4.7 - -75.9 - 1212.4) / 14901.5
=-0.076

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 -3.09 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.05380.7380.72120.75980.93361.31021.34040.88870.36570.3825
GMI 0.80320.60040.58920.50140.59210.70820.81140.92741.21921.2507
AQI 0.98160.96870.98791.05221.01641.12111.1391.25271.28461.1667
SGI 1.27881.17761.06750.89690.7620.73610.76150.8570.98781.0613
DEPI 0.91591.00041.0871.15521.14041.1371.10611.06811.0751.0684
SGAI 0.9561.04051.12641.34021.55271.64171.51911.30031.1431.0452
LVGI 0.95970.94170.94580.95480.9360.96121.0080.78260.82210.8148
TATA -0.0245-0.0377-0.0389-0.0319-0.0365-0.0272-0.0373-0.0516-0.0723-0.076
M-score -2.40-2.95-3.07-3.21-3.19-2.74-2.68-2.86-3.14-3.09
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