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GuruFocus has detected 7 Warning Signs with Energy Transfer Partners LP $ETP.
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Energy Transfer Partners LP (NYSE:ETP)
Beneish M-Score
-2.14 (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.

Energy Transfer Partners LP has a M-score of -2.14 signals that the company is a manipulator.

ETP' s Beneish M-Score Range Over the Past 10 Years
Min: -7.03   Max: 0.67
Current: -2.14

-7.03
0.67

During the past 13 years, the highest Beneish M-Score of Energy Transfer Partners LP was 0.67. The lowest was -7.03. And the median was -2.48.


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 Energy Transfer 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 * 2.2268+0.528 * 0.7186+0.404 * 0.8173+0.892 * 0.6365+0.115 * 1.0929
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.151+4.679 * -0.0422-0.327 * 1.0777
=-2.14

* 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 $3,002 Mil.
Revenue was 6526 + 5531 + 5289 + 4481 = $21,827 Mil.
Gross Profit was 2771 + 1212 + 1285 + 1165 = $6,433 Mil.
Total Current Assets was $5,729 Mil.
Total Assets was $70,191 Mil.
Property, Plant and Equipment(Net PPE) was $50,917 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,986 Mil.
Selling, General & Admin. Expense(SGA) was $348 Mil.
Total Current Liabilities was $6,203 Mil.
Long-Term Debt was $31,991 Mil.
Net Income was -458 + 74 + 370 + 311 = $297 Mil.
Non Operating Income was 84 + -219 + 65 + 23 = $-47 Mil.
Cash Flow from Operations was 838 + 1039 + 466 + 960 = $3,303 Mil.
Accounts Receivable was $2,118 Mil.
Revenue was 5825 + 6601 + 11540 + 10326 = $34,292 Mil.
Gross Profit was 3351 + 1141 + 1551 + 1220 = $7,263 Mil.
Total Current Assets was $4,698 Mil.
Total Assets was $65,173 Mil.
Property, Plant and Equipment(Net PPE) was $45,087 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,929 Mil.
Selling, General & Admin. Expense(SGA) was $475 Mil.
Total Current Liabilities was $4,121 Mil.
Long-Term Debt was $28,786 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)
=(3002 / 21827) / (2118 / 34292)
=0.13753608 / 0.06176368
=2.2268

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)
=(7263 / 34292) / (6433 / 21827)
=0.21179867 / 0.29472671
=0.7186

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 - (5729 + 50917) / 70191) / (1 - (4698 + 45087) / 65173)
=0.19297346 / 0.23611005
=0.8173

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
=21827 / 34292
=0.6365

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))
=(1929 / (1929 + 45087)) / (1986 / (1986 + 50917))
=0.04102859 / 0.0375404
=1.0929

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)
=(348 / 21827) / (475 / 34292)
=0.01594356 / 0.01385163
=1.151

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)
=((31991 + 6203) / 70191) / ((28786 + 4121) / 65173)
=0.54414384 / 0.50491768
=1.0777

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
=(297 - -47 - 3303) / 70191
=-0.0422

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.

Energy Transfer Partners LP has a M-score of -2.14 signals that the company is likely to 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.

Energy Transfer Partners LP Annual Data

Aug07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.10260.69061.75710.80570.90192.21450.3750.87161.01972.2268
GMI 0.65091.48990.56831.11760.99341.69741.87060.66420.6010.7186
AQI 0.94320.74421.41430.66111.23642.23260.94511.06720.83960.8173
SGI 0.86421.36830.58291.07861.16362.30953.07831.14770.61820.6365
DEPI 1.09521.04360.87971.11150.98331.28370.52181.15651.00251.0929
SGAI 1.53780.20131.53640.93810.84471.08380.36160.941.47771.151
LVGI 0.89331.07880.93660.99990.96940.83971.06120.97531.00481.0777
TATA -0.0565-0.0389-0.0091-0.0471-0.04-0.0167-0.0543-0.0344-0.0273-0.0422
M-score -3.03-2.35-2.34-2.86-2.480.66-0.98-2.74-3.29-2.14

Energy Transfer Partners LP Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.03750.88420.58630.82740.76471.00511.56611.81572.19262.2268
GMI 0.90480.6680.62460.59010.53050.59750.53170.46740.51130.7186
AQI 0.94941.06721.00511.08510.96280.83960.84850.80520.78880.8173
SGI 1.22071.13131.06160.96130.75780.62710.5390.44190.50430.6365
DEPI 0.66851.15650.8631.35891.34141.00251.39461.05831.12141.0929
SGAI 0.69340.90051.2321.46681.56771.54261.4321.2741.15221.151
LVGI 1.02840.97530.91380.94380.9611.00480.99911.00111.04831.0777
TATA -0.0597-0.0339-0.0398-0.0204-0.025-0.0273-0.0334-0.0333-0.0343-0.0422
M-score -2.59-2.73-3.22-2.97-3.34-3.31-2.86-2.78-2.36-2.14
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