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Magellan Midstream Partners, L.P. (NYSE:MMP)
Beneish M-Score
-2.18 (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.

Magellan Midstream Partners, L.P. has a M-score of -2.19 signals that the company is a manipulator.

MMP' s 10-Year Beneish M-Score Range
Min: -4.75   Max: -1.53
Current: -2.18

-4.75
-1.53

During the past 13 years, the highest Beneish M-Score of Magellan Midstream Partners, L.P. was -1.53. The lowest was -4.75. And the median was -2.54.


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 Magellan Midstream Partners, L.P. 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 * 0.8638+0.528 * 0.9413+0.404 * 2.0259+0.892 * 1.2527+0.115 * 0.9588
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9266+4.679 * -0.0402-0.327 * 1.0256
=-2.19

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $103 Mil.
Revenue was 496.446 + 618.606 + 577.438 + 443.835 = $2,136 Mil.
Gross Profit was 262.469 + 347.069 + 295.222 + 220.274 = $1,125 Mil.
Total Current Assets was $358 Mil.
Total Assets was $5,124 Mil.
Property, Plant and Equipment(Net PPE) was $3,943 Mil.
Depreciation, Depletion and Amortization(DDA) was $156 Mil.
Selling, General & Admin. Expense(SGA) was $143 Mil.
Total Current Liabilities was $347 Mil.
Long-Term Debt was $2,910 Mil.
Net Income was 146.26 + 242.554 + 190.007 + 125.623 = $704 Mil.
Non Operating Income was -0.602 + -0.599 + 1.62 + -0.54 = $-0 Mil.
Cash Flow from Operations was 207.282 + 270.074 + 251.459 + 181.568 = $910 Mil.
Accounts Receivable was $95 Mil.
Revenue was 443.912 + 432.421 + 503.195 + 325.869 = $1,705 Mil.
Gross Profit was 251.169 + 206.842 + 250.612 + 136.778 = $845 Mil.
Total Current Assets was $464 Mil.
Total Assets was $4,388 Mil.
Property, Plant and Equipment(Net PPE) was $3,576 Mil.
Depreciation, Depletion and Amortization(DDA) was $136 Mil.
Selling, General & Admin. Expense(SGA) was $124 Mil.
Total Current Liabilities was $579 Mil.
Long-Term Debt was $2,140 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)
=(103.095 / 2136.325) / (95.276 / 1705.397)
=0.04825811 / 0.05586734
=0.8638

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)
=(347.069 / 1705.397) / (262.469 / 2136.325)
=0.49572094 / 0.52662118
=0.9413

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 - (358.458 + 3942.727) / 5124.259) / (1 - (464.319 + 3575.837) / 4388.068)
=0.16062303 / 0.07928592
=2.0259

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
=2136.325 / 1705.397
=1.2527

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))
=(135.534 / (135.534 + 3575.837)) / (156.12 / (156.12 + 3942.727))
=0.03651858 / 0.03808876
=0.9588

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)
=(143.422 / 2136.325) / (123.563 / 1705.397)
=0.06713492 / 0.0724541
=0.9266

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)
=((2910.496 + 346.626) / 5124.259) / ((2140.083 + 579.361) / 4388.068)
=0.6356279 / 0.61973607
=1.0256

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
=(704.444 - -0.121 - 910.383) / 5124.259
=-0.0402

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.

Magellan Midstream Partners, L.P. has a M-score of -2.19 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.

Magellan Midstream Partners, L.P. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.03370.57361.00661.0450.72651.970.78890.83821.10261.1082
GMI 1.20381.32320.93480.93060.77770.89871.20560.92550.94830.8651
AQI 0.81470.91090.86150.96320.73520.70042.24831.08741.2721.8296
SGI 1.43331.63521.07611.07730.92070.83561.53571.12281.01341.0708
DEPI 1.36120.82290.98591.02910.98071.04351.03320.91961.00911.0165
SGAI 0.67340.65521.02021.0041.09681.37210.73850.9221.09411.131
LVGI 0.9290.98191.02891.01730.91371.22290.97191.03781.03521.0115
TATA -0.0595-0.0351-0.0587-0.0093-0.1443-0.0455-0.0301-0.0405-0.0474-0.0395
M-score -2.19-2.29-2.79-2.47-3.69-2.25-1.67-2.72-2.54-2.26

Magellan Midstream Partners, L.P. Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.00110.92431.13111.10261.09611.11340.95791.10820.77480.8638
GMI 0.92940.95771.02480.94830.8650.84630.81940.86510.89330.9413
AQI 1.11021.10531.2841.2721.42591.67011.72491.82961.89752.0259
SGI 1.0771.14381.05761.01340.9510.91421.03851.07081.21791.2527
DEPI 0.91520.95451.00631.00911.01280.99580.98711.01651.02460.9588
SGAI 0.93970.84151.00721.09411.24391.37981.18051.1310.97480.9266
LVGI 1.0030.99861.00221.03521.04221.03171.03271.01151.01761.0256
TATA -0.025-0.0597-0.0406-0.0475-0.0606-0.0399-0.0457-0.0395-0.0319-0.0402
M-score -2.52-2.66-2.37-2.54-2.67-2.53-2.54-2.26-2.33-2.19
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