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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.
During the past 6 years, the highest Beneish M-Score of Mid-Con Energy Partners LP was -1.03. The lowest was -5.36. And the median was -3.05.
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 * 1.0709||+||0.528 * 1.104||+||0.404 * 0.7783||+||0.892 * 0.6961||+||0.115 * 0.6502|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0806||+||4.679 * -0.5366||-||0.327 * 1.2143|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $5.23 Mil.|
Revenue was 4.689 + 13.837 + 26.061 + 38.264 = $82.85 Mil.
Gross Profit was -1.82 + 7.18 + 16.91 + 29.297 = $51.57 Mil.
Total Current Assets was $36.53 Mil.
Total Assets was $292.63 Mil.
Property, Plant and Equipment(Net PPE) was $252.90 Mil.
Depreciation, Depletion and Amortization(DDA) was $30.02 Mil.
Selling, General & Admin. Expense(SGA) was $7.70 Mil.
Total Current Liabilities was $59.13 Mil.
Long-Term Debt was $110.00 Mil.
Net Income was -15.769 + -3.313 + -57.961 + -25.478 = $-102.52 Mil.
Non Operating Income was 0 + 0 + 0.012 + -0.054 = $-0.04 Mil.
Cash Flow from Operations was 12.795 + 12.104 + 17.091 + 12.556 = $54.55 Mil.
|Accounts Receivable was $7.02 Mil.
Revenue was 12.74 + 19.215 + 51.616 + 35.453 = $119.02 Mil.
Gross Profit was 3.804 + 9.191 + 42.03 + 26.759 = $81.78 Mil.
Total Current Assets was $24.28 Mil.
Total Assets was $429.47 Mil.
Property, Plant and Equipment(Net PPE) was $399.15 Mil.
Depreciation, Depletion and Amortization(DDA) was $29.58 Mil.
Selling, General & Admin. Expense(SGA) was $10.24 Mil.
Total Current Liabilities was $4.41 Mil.
Long-Term Debt was $200.00 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)|
|=||(5.233 / 82.851)||/||(7.02 / 119.024)|
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)|
|=||(81.784 / 119.024)||/||(51.567 / 82.851)|
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 - (36.533 + 252.898) / 292.633)||/||(1 - (24.276 + 399.153) / 429.467)|
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))|
|=||(29.579 / (29.579 + 399.153))||/||(30.022 / (30.022 + 252.898))|
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)|
|=||(7.699 / 82.851)||/||(10.235 / 119.024)|
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)|
|=||((110 + 59.133) / 292.633)||/||((200 + 4.409) / 429.467)|
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|
|=||(-102.521 - -0.042||-||54.546)||/||292.633|
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 -5.36 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
Mid-Con Energy Partners LP Annual Data
Mid-Con Energy Partners LP Quarterly Data