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GuruFocus has detected 2 Warning Signs with Mid-Con Energy Partners LP $MCEP.
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Mid-Con Energy Partners LP (NAS:MCEP)
Beneish M-Score
-2.64 (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.

Mid-Con Energy Partners LP has a M-score of -2.64 suggests that the company is not a manipulator.

MCEP' s Beneish M-Score Range Over the Past 10 Years
Min: -4.85   Max: -1.73
Current: -2.64

-4.85
-1.73

During the past 7 years, the highest Beneish M-Score of Mid-Con Energy Partners LP was -1.73. The lowest was -4.85. And the median was -3.00.


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 * 2.5553+0.528 * 1.4741+0.404 * 0.5997+0.892 * 0.4559+0.115 * 1.3298
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6058+4.679 * -0.253-0.327 * 0.8442
=-2.64

* 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 $5.30 Mil.
Revenue was 11.404 + 13.966 + 4.689 + 13.837 = $43.90 Mil.
Gross Profit was 5.447 + 7.504 + -1.82 + 7.18 = $18.31 Mil.
Total Current Assets was $8.56 Mil.
Total Assets was $276.29 Mil.
Property, Plant and Equipment(Net PPE) was $265.22 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.07 Mil.
Selling, General & Admin. Expense(SGA) was $6.89 Mil.
Total Current Liabilities was $9.15 Mil.
Long-Term Debt was $122.00 Mil.
Net Income was -4.12 + -2.861 + -15.769 + -3.313 = $-26.06 Mil.
Non Operating Income was 0.055 + -0.164 + 0 + 0 = $-0.11 Mil.
Cash Flow from Operations was 8.308 + 10.729 + 12.795 + 12.104 = $43.94 Mil.
Accounts Receivable was $4.55 Mil.
Revenue was 26.061 + 38.264 + 12.74 + 19.215 = $96.28 Mil.
Gross Profit was 16.91 + 29.297 + 3.804 + 9.191 = $59.20 Mil.
Total Current Assets was $35.22 Mil.
Total Assets was $327.09 Mil.
Property, Plant and Equipment(Net PPE) was $286.91 Mil.
Depreciation, Depletion and Amortization(DDA) was $34.17 Mil.
Selling, General & Admin. Expense(SGA) was $9.41 Mil.
Total Current Liabilities was $33.91 Mil.
Long-Term Debt was $150.00 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)
=(5.302 / 43.896) / (4.551 / 96.28)
=0.12078549 / 0.04726838
=2.5553

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)
=(59.202 / 96.28) / (18.311 / 43.896)
=0.61489406 / 0.41714507
=1.4741

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 - (8.556 + 265.217) / 276.286) / (1 - (35.217 + 286.908) / 327.086)
=0.00909565 / 0.01516726
=0.5997

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
=43.896 / 96.28
=0.4559

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))
=(34.174 / (34.174 + 286.908)) / (23.074 / (23.074 + 265.217))
=0.10643387 / 0.08003718
=1.3298

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)
=(6.89 / 43.896) / (9.411 / 96.28)
=0.15696191 / 0.09774616
=1.6058

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)
=((122 + 9.147) / 276.286) / ((150 + 33.909) / 327.086)
=0.47467841 / 0.56226497
=0.8442

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
=(-26.063 - -0.109 - 43.936) / 276.286
=-0.253

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 -2.64 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.

Mid-Con Energy Partners LP Annual Data

Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.74680.88810.75310.74142.5553
GMI 0.88581.08041.00621.20881.4741
AQI 0.45010.4932.40541.34520.5997
SGI 1.71141.19011.57720.76250.4559
DEPI 1.16030.89681.45110.47891.3298
SGAI 1.70630.93530.74120.86231.6058
LVGI 0.9911.1910.7471.20.8442
TATA -0.1126-0.1496-0.0615-0.4416-0.2531
M-score -2.99-3.34-1.73-4.85-2.65

Mid-Con Energy Partners LP Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.94270.75310.50220.55670.57850.74140.93031.07091.58312.5553
GMI 1.06391.00621.02240.97481.01921.20881.12941.1041.36111.4741
AQI 1.24642.40544.90674.15923.48681.34520.75810.77830.76780.5997
SGI 1.28441.57721.55671.53721.260.76250.7230.69610.48060.4559
DEPI 1.38311.45111.0050.8820.59450.47890.58830.65020.98811.3298
SGAI 0.93650.74120.50520.49090.53980.86231.05281.08061.50721.6058
LVGI 0.85510.7470.82650.77280.94211.21.17741.21430.94250.8442
TATA -0.0661-0.0615-0.0678-0.0902-0.2021-0.4416-0.4724-0.5385-0.474-0.253
M-score -2.35-1.73-1.03-1.42-2.52-4.85-5.15-5.36-4.60-2.64
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