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Beneish M-Score -1.03 higher than -2.22, which implies that it might have manipulated its financial results.
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.
During the past 5 years, the highest Beneish M-Score of Mid-Con Energy Partners LP was -1.03. The lowest was -3.34. And the median was -2.98.
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 Mid-Con 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 * 0.5022||+||0.528 * 1.0224||+||0.404 * 4.9067||+||0.892 * 1.5567||+||0.115 * 1.005|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.5052||+||4.679 * -0.0678||-||0.327 * 0.8265|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $6.1 Mil.|
Revenue was 19.215 + 51.616 + 35.453 + 19.444 = $125.7 Mil.
Gross Profit was 9.191 + 42.03 + 26.759 + 11.355 = $89.3 Mil.
Total Current Assets was $30.5 Mil.
Total Assets was $443.9 Mil.
Property, Plant and Equipment(Net PPE) was $404.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.1 Mil.
Selling, General & Admin. Expense(SGA) was $10.3 Mil.
Total Current Liabilities was $4.4 Mil.
Long-Term Debt was $203.0 Mil.
Net Income was -4.112 + 0.082 + 17.002 + 3.847 = $16.8 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 8.283 + 10.884 + 14.121 + 13.609 = $46.9 Mil.
|Accounts Receivable was $7.9 Mil.
Revenue was 19.759 + 22.038 + 16.188 + 22.779 = $80.8 Mil.
Gross Profit was 13.712 + 16.384 + 10.413 + 18.161 = $58.7 Mil.
Total Current Assets was $8.8 Mil.
Total Assets was $235.4 Mil.
Property, Plant and Equipment(Net PPE) was $225.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $14.6 Mil.
Selling, General & Admin. Expense(SGA) was $13.1 Mil.
Total Current Liabilities was $10.1 Mil.
Long-Term Debt was $123.0 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)|
|=||(6.148 / 125.728)||/||(7.864 / 80.764)|
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)|
|=||(42.03 / 80.764)||/||(9.191 / 125.728)|
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 - (30.458 + 404.405) / 443.949)||/||(1 - (8.752 + 225.695) / 235.429)|
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))|
|=||(14.621 / (14.621 + 225.695))||/||(26.06 / (26.06 + 404.405))|
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)|
|=||(10.323 / 125.728)||/||(13.127 / 80.764)|
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)|
|=||((203 + 4.413) / 443.949)||/||((123 + 10.086) / 235.429)|
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|
|=||(16.819 - 0||-||46.897)||/||443.949|
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.
Mid-Con Energy Partners LP has a M-score of -1.03 signals that the company is likely to 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
Mid-Con Energy Partners LP Annual Data
Mid-Con Energy Partners LP Quarterly Data