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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 -1.73. The lowest was -4.84. And the median was -3.14.
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 * 0.7414||+||0.528 * 1.2088||+||0.404 * 1.3452||+||0.892 * 0.7625||+||0.115 * 0.4789|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8623||+||4.679 * -0.4399||-||0.327 * 1.2|
|This Year (Dec15) TTM:||Last Year (Dec14) TTM:|
|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.
Net Income was -57.961 + -25.478 + -7.944 + -4.112 = $-95.50 Mil.
Non Operating Income was 0.012 + -0.054 + 0 + 0 = $-0.04 Mil.
Cash Flow from Operations was 17.091 + 12.556 + 10.495 + 8.283 = $48.43 Mil.
|Accounts Receivable was $8.05 Mil.
Revenue was 51.616 + 35.453 + 19.444 + 19.759 = $126.27 Mil.
Gross Profit was 42.03 + 26.759 + 11.355 + 13.712 = $93.86 Mil.
Total Current Assets was $42.21 Mil.
Total Assets was $454.63 Mil.
Property, Plant and Equipment(Net PPE) was $407.30 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.88 Mil.
Selling, General & Admin. Expense(SGA) was $14.31 Mil.
Total Current Liabilities was $8.02 Mil.
Long-Term Debt was $205.00 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)|
|=||(4.551 / 96.28)||/||(8.051 / 126.272)|
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)|
|=||(29.297 / 126.272)||/||(16.91 / 96.28)|
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 - (35.217 + 286.908) / 327.086)||/||(1 - (42.207 + 407.295) / 454.628)|
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))|
|=||(21.877 / (21.877 + 407.295))||/||(34.174 / (34.174 + 286.908))|
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)|
|=||(9.411 / 96.28)||/||(14.313 / 126.272)|
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)|
|=||((150 + 33.909) / 327.086)||/||((205 + 8.016) / 454.628)|
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|
|=||(-95.495 - -0.042||-||48.425)||/||327.086|
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 -4.84 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