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Mid-Con Energy Partners LP (NAS:MCEP)
Beneish M-Score
-1.03 (As of Today)

Warning Sign:

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.

Mid-Con Energy Partners LP has a M-score of -1.03 signals that the company is a manipulator.

MCEP' s 10-Year Beneish M-Score Range
Min: -3.34   Max: -1.03
Current: -1.03

-3.34
-1.03

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.


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 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
=-1.03

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

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

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)
=(6.148 / 125.728) / (7.864 / 80.764)
=0.04889921 / 0.09737012
=0.5022

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)
=(42.03 / 80.764) / (9.191 / 125.728)
=0.72643752 / 0.7105418
=1.0224

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 - (30.458 + 404.405) / 443.949) / (1 - (8.752 + 225.695) / 235.429)
=0.02046631 / 0.00417111
=4.9067

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
=125.728 / 80.764
=1.5567

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))
=0.06084073 / 0.06053918
=1.005

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)
=0.08210582 / 0.16253529
=0.5052

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)
=0.46720006 / 0.56529145
=0.8265

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
=(16.819 - 0 - 46.897) / 443.949
=-0.0678

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.


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.

Mid-Con Energy Partners LP Annual Data

Dec10Dec11Dec12Dec13Dec14
DSRI 0.7531
GMI 1.0062
AQI 2.4054
SGI 1.5772
DEPI 1.4511
SGAI 0.7412
LVGI 0.747
TATA -0.0615
M-score -1.73

Mid-Con Energy Partners LP Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.08250.94270.75310.5022
GMI 1.04120.92531.00621.0224
AQI 0.40681.24642.40544.9067
SGI 1.11811.28441.57721.5567
DEPI 1.10621.38311.45111.005
SGAI 0.85620.93650.74120.5052
LVGI 1.01750.85510.7470.8265
TATA -0.1347-0.0661-0.0615-0.0678
M-score -3.12-2.43-1.73-1.03
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