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Magellan Midstream Partners, L.P. (NYSE:MMP)
Beneish M-Score
-2.76 (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 -2.76 suggests that the company is not a manipulator.

MMP' s 10-Year Beneish M-Score Range
Min: -3.66   Max: -0.57
Current: -2.76

-3.66
-0.57

During the past 13 years, the highest Beneish M-Score of Magellan Midstream Partners, L.P. was -0.57. The lowest was -3.66. And the median was -2.41.


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 * 0.5983+0.528 * 0.9344+0.404 * 1.3512+0.892 * 1.214+0.115 * 0.9731
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9219+4.679 * -0.0466-0.327 * 1.0004
=-2.76

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $84 Mil.
Revenue was 667.07 + 521.601 + 496.446 + 618.606 = $2,304 Mil.
Gross Profit was 357.705 + 297.623 + 262.469 + 347.069 = $1,265 Mil.
Total Current Assets was $403 Mil.
Total Assets was $5,517 Mil.
Property, Plant and Equipment(Net PPE) was $4,329 Mil.
Depreciation, Depletion and Amortization(DDA) was $162 Mil.
Selling, General & Admin. Expense(SGA) was $148 Mil.
Total Current Liabilities was $536 Mil.
Long-Term Debt was $2,983 Mil.
Net Income was 252.085 + 198.62 + 146.26 + 242.554 = $840 Mil.
Non Operating Income was -9.139 + -0.566 + -0.602 + -0.599 = $-11 Mil.
Cash Flow from Operations was 393.986 + 235.959 + 207.282 + 270.074 = $1,107 Mil.
Accounts Receivable was $116 Mil.
Revenue was 577.438 + 443.835 + 443.912 + 432.421 = $1,898 Mil.
Gross Profit was 295.222 + 220.274 + 251.169 + 206.842 = $974 Mil.
Total Current Assets was $397 Mil.
Total Assets was $4,821 Mil.
Property, Plant and Equipment(Net PPE) was $3,916 Mil.
Depreciation, Depletion and Amortization(DDA) was $142 Mil.
Selling, General & Admin. Expense(SGA) was $132 Mil.
Total Current Liabilities was $638 Mil.
Long-Term Debt was $2,435 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)
=(84.465 / 2303.723) / (116.295 / 1897.606)
=0.03666456 / 0.06128511
=0.5983

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)
=(297.623 / 1897.606) / (357.705 / 2303.723)
=0.51301851 / 0.54905299
=0.9344

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 - (402.667 + 4329.334) / 5517.285) / (1 - (396.733 + 3916.258) / 4820.812)
=0.1423316 / 0.10533931
=1.3512

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
=2303.723 / 1897.606
=1.214

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))
=(142.23 / (142.23 + 3916.258)) / (161.741 / (161.741 + 4329.334))
=0.03504507 / 0.03601387
=0.9731

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)
=(148.288 / 2303.723) / (132.496 / 1897.606)
=0.06436885 / 0.06982271
=0.9219

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)
=((2982.895 + 536.155) / 5517.285) / ((2435.316 + 638.276) / 4820.812)
=0.63782277 / 0.63756728
=1.0004

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
=(839.519 - -10.906 - 1107.301) / 5517.285
=-0.0466

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 -2.76 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 own currency.

Magellan Midstream Partners, L.P. Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.75140.88371.12080.64632.32780.82260.7971.23731.04990.5983
GMI 1.32320.93480.93060.77770.89871.20560.92550.94830.86510.9344
AQI 0.91090.86150.96320.73520.70042.24831.08741.2721.82961.3512
SGI 1.63521.07611.07730.92070.83561.53571.12281.01341.07081.214
DEPI 0.80630.97961.01920.9581.03471.03320.91961.00911.01650.9731
SGAI 0.65521.02021.0041.09681.37210.73850.9221.09411.1310.9219
LVGI 0.98191.02891.01730.91371.22290.97191.03781.03521.01151.0004
TATA -0.0334-0.0556-0.0063-0.1446-0.0455-0.0301-0.0405-0.0474-0.0391-0.0466
M-score -2.12-2.88-2.39-3.77-1.93-1.64-2.76-2.42-2.31-2.76

Magellan Midstream Partners, L.P. Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.08771.23731.09611.153412.35921.04990.69150.84450.76570.5983
GMI 1.02480.94830.8650.84630.81940.86510.89330.94130.93810.9344
AQI 1.2841.2721.42591.67011.72491.82961.89752.02591.80421.3512
SGI 1.05761.01340.9510.91421.03851.07081.21791.25271.21431.214
DEPI 0.98771.00911.01280.99580.99621.01651.02460.95880.94030.9731
SGAI 1.00721.09411.24391.37981.18051.1310.97480.92660.9340.9219
LVGI 1.00221.03521.04221.03171.03271.01151.01761.02561.01061.0004
TATA -0.0415-0.0475-0.0606-0.0399-0.0468-0.0391-0.0315-0.0398-0.0339-0.0466
M-score -3.34-2.42-2.67-2.497.94-2.31-2.41-2.20-2.37-2.76
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