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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 -2.36 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Energy Transfer Partners LP was 4.38. The lowest was -30.34. And the median was -2.28.
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 * 0.9253||+||0.528 * 1.2138||+||0.404 * 0.7951||+||0.892 * 1.3981||+||0.115 * 0.9265|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.5379||+||4.679 * -0.0521||-||0.327 * 1.0663|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $3,983 Mil.|
Revenue was 13029 + 12232 + 12032 + 11902 = $49,195 Mil.
Gross Profit was 1085 + 1047 + 867 + 917 = $3,916 Mil.
Total Current Assets was $7,213 Mil.
Total Assets was $44,223 Mil.
Property, Plant and Equipment(Net PPE) was $26,491 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,055 Mil.
Selling, General & Admin. Expense(SGA) was $373 Mil.
Total Current Liabilities was $7,515 Mil.
Long-Term Debt was $16,220 Mil.
Net Income was 471 + 415 + -541 + 355 = $700 Mil.
Non Operating Income was 90 + 144 + -136 + 122 = $220 Mil.
Cash Flow from Operations was 891 + 682 + 631 + 578 = $2,782 Mil.
|Accounts Receivable was $3,079 Mil.
Revenue was 11551 + 10854 + 10981 + 1802 = $35,188 Mil.
Gross Profit was 995 + 933 + 863 + 609 = $3,400 Mil.
Total Current Assets was $5,858 Mil.
Total Assets was $43,651 Mil.
Property, Plant and Equipment(Net PPE) was $24,734 Mil.
Depreciation, Depletion and Amortization(DDA) was $910 Mil.
Selling, General & Admin. Expense(SGA) was $496 Mil.
Total Current Liabilities was $5,728 Mil.
Long-Term Debt was $16,243 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(3983 / 49195)||/||(3079 / 35188)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1047 / 35188)||/||(1085 / 49195)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (7213 + 26491) / 44223)||/||(1 - (5858 + 24734) / 43651)|
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.
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))|
|=||(910 / (910 + 24734))||/||(1055 / (1055 + 26491))|
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)|
|=||(373 / 49195)||/||(496 / 35188)|
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)|
|=||((16220 + 7515) / 44223)||/||((16243 + 5728) / 43651)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(700 - 220||-||2782)||/||44223|
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 -2.36 suggests that the company will not be a manipulator.
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
Energy Transfer Partners LP Annual Data
Energy Transfer Partners LP Quarterly Data