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GuruFocus has detected 5 Warning Signs with Enterprise Products Partners LP $EPD.
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Enterprise Products Partners LP (NYSE:EPD)
Beneish M-Score
-2.37 (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.

Enterprise Products Partners LP has a M-score of -2.37 suggests that the company is not a manipulator.

EPD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.13   Max: -1.44
Current: -2.37

-3.13
-1.44

During the past 13 years, the highest Beneish M-Score of Enterprise Products Partners LP was -1.44. The lowest was -3.13. And the median was -2.37.


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 Enterprise Products 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 * 1.521+0.528 * 0.8469+0.404 * 0.9278+0.892 * 0.8518+0.115 * 1.0145
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9759+4.679 * -0.0294-0.327 * 0.9863
=-2.37

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $3,330 Mil.
Revenue was 6478.8 + 5920.4 + 5617.8 + 5005.3 = $23,022 Mil.
Gross Profit was 870.1 + 854.7 + 795.6 + 858.4 = $3,379 Mil.
Total Current Assets was $6,528 Mil.
Total Assets was $52,194 Mil.
Property, Plant and Equipment(Net PPE) was $33,293 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,552 Mil.
Selling, General & Admin. Expense(SGA) was $160 Mil.
Total Current Liabilities was $8,251 Mil.
Long-Term Debt was $21,121 Mil.
Net Income was 658.8 + 634.6 + 558.5 + 661.2 = $2,513 Mil.
Non Operating Income was 3.8 + -6.2 + -22.9 + 3.6 = $-22 Mil.
Cash Flow from Operations was 1407.8 + 813.8 + 945.5 + 899.7 = $4,067 Mil.
Accounts Receivable was $2,570 Mil.
Revenue was 6155 + 6307.9 + 7092.5 + 7472.5 = $27,028 Mil.
Gross Profit was 912.8 + 855.3 + 735 + 856.1 = $3,359 Mil.
Total Current Assets was $4,298 Mil.
Total Assets was $48,802 Mil.
Property, Plant and Equipment(Net PPE) was $32,035 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,516 Mil.
Selling, General & Admin. Expense(SGA) was $193 Mil.
Total Current Liabilities was $7,167 Mil.
Long-Term Debt was $20,677 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)
=(3329.5 / 23022.3) / (2569.9 / 27027.9)
=0.14462065 / 0.09508323
=1.521

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)
=(3359.2 / 27027.9) / (3378.8 / 23022.3)
=0.12428639 / 0.14676205
=0.8469

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 - (6528.2 + 33292.5) / 52194) / (1 - (4298.3 + 32034.7) / 48802.2)
=0.23706365 / 0.25550487
=0.9278

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
=23022.3 / 27027.9
=0.8518

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))
=(1516 / (1516 + 32034.7)) / (1552 / (1552 + 33292.5))
=0.04518535 / 0.04454075
=1.0145

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)
=(160.1 / 23022.3) / (192.6 / 27027.9)
=0.00695413 / 0.00712597
=0.9759

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)
=((21120.9 + 8250.5) / 52194) / ((20676.9 + 7166.6) / 48802.2)
=0.56273518 / 0.5705378
=0.9863

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
=(2513.1 - -21.7 - 4066.8) / 52194
=-0.0294

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.

Enterprise Products Partners LP has a M-score of -2.37 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.

Enterprise Products Partners LP Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.25440.49052.08780.93620.89331.00571.12280.69491.19261.521
GMI 1.1611.06410.68430.80631.39930.8951.0330.93940.6260.8469
AQI 0.93581.2091.14861.00160.82650.84931.05291.63061.01960.9278
SGI 1.21152.09260.71921.32251.31340.9611.12081.00470.56370.8518
DEPI 1.00811.02410.9350.93161.11691.01950.98480.99280.96371.0145
SGAI 1.14190.74761.85250.84710.67590.97480.98651.13381.5930.9759
LVGI 1.15131.0161.00760.99611.02930.99160.97730.93960.99630.9863
TATA -0.0636-0.0255-0.0795-0.0652-0.0376-0.0151-0.0316-0.0292-0.0299-0.0294
M-score -2.37-1.93-2.36-2.64-2.27-2.69-2.36-2.67-3.13-2.37

Enterprise Products Partners LP Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.87410.69490.69330.84690.86231.19261.42031.46681.43791.521
GMI 1.01070.93940.86260.78490.68360.6260.61140.62040.71560.8469
AQI 1.04241.63061.6131.47681.70111.01960.99641.03930.92760.9278
SGI 1.1131.00470.86320.73250.61070.56370.57770.62250.73070.8518
DEPI 0.9630.99280.9860.92730.96470.96370.99011.08911.0531.0145
SGAI 1.00541.13381.27081.46071.69051.5931.53861.37141.12760.9759
LVGI 0.98980.93960.91580.92490.91870.99631.00190.99140.97990.9863
TATA -0.0321-0.0292-0.0234-0.0341-0.0318-0.0299-0.0278-0.0265-0.0292-0.0294
M-score -2.62-2.67-2.84-3.00-3.08-3.13-2.90-2.75-2.64-2.37
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