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Magellan Midstream Partners LP (NYSE:MMP)
Beneish M-Score
-2.77 (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 LP has a M-score of -2.77 suggests that the company is not a manipulator.

MMP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.77   Max: 7.94
Current: -2.77

-3.77
7.94

During the past 13 years, the highest Beneish M-Score of Magellan Midstream Partners LP was 7.94. The lowest was -3.77. And the median was -2.36.


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 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 * 0.9636+0.528 * 0.9577+0.404 * 1.0429+0.892 * 0.9622+0.115 * 1.0938
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0941+4.679 * -0.0436-0.327 * 1.0298
=-2.77

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $90 Mil.
Revenue was 519.816 + 601.588 + 577.232 + 487.543 = $2,186 Mil.
Gross Profit was 282.998 + 312.455 + 353.804 + 261.603 = $1,211 Mil.
Total Current Assets was $516 Mil.
Total Assets was $6,392 Mil.
Property, Plant and Equipment(Net PPE) was $4,914 Mil.
Depreciation, Depletion and Amortization(DDA) was $169 Mil.
Selling, General & Admin. Expense(SGA) was $157 Mil.
Total Current Liabilities was $679 Mil.
Long-Term Debt was $3,552 Mil.
Net Income was 207.07 + 203.483 + 252.706 + 177.391 = $841 Mil.
Non Operating Income was 29.17 + -1.672 + -2.346 + 5.899 = $31 Mil.
Cash Flow from Operations was 209.568 + 345.588 + 309.285 + 223.736 = $1,088 Mil.
Accounts Receivable was $97 Mil.
Revenue was 530.302 + 723.699 + 521.601 + 496.446 = $2,272 Mil.
Gross Profit was 287.416 + 357.705 + 297.623 + 262.469 = $1,205 Mil.
Total Current Assets was $396 Mil.
Total Assets was $5,605 Mil.
Property, Plant and Equipment(Net PPE) was $4,400 Mil.
Depreciation, Depletion and Amortization(DDA) was $166 Mil.
Selling, General & Admin. Expense(SGA) was $149 Mil.
Total Current Liabilities was $419 Mil.
Long-Term Debt was $3,184 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)
=(89.662 / 2186.179) / (96.7 / 2272.048)
=0.04101311 / 0.04256072
=0.9636

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)
=(1205.213 / 2272.048) / (1210.86 / 2186.179)
=0.53045226 / 0.55387047
=0.9577

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 - (515.531 + 4913.509) / 6392.314) / (1 - (395.65 + 4399.594) / 5605.117)
=0.15069253 / 0.14448815
=1.0429

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
=2186.179 / 2272.048
=0.9622

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))
=(165.927 / (165.927 + 4399.594)) / (168.869 / (168.869 + 4913.509))
=0.0363435 / 0.03322638
=1.0938

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)
=(156.705 / 2186.179) / (148.851 / 2272.048)
=0.07167986 / 0.06551402
=1.0941

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)
=((3552.032 + 679.094) / 6392.314) / ((3183.75 + 418.887) / 5605.117)
=0.66190835 / 0.64274073
=1.0298

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
=(840.65 - 31.051 - 1088.177) / 6392.314
=-0.0436

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 LP has a M-score of -2.77 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 LP Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.37711.12080.64682.32610.82260.7971.23731.04990.59831.0455
GMI 1.48910.93060.77970.89641.20560.92550.94830.86510.93440.9887
AQI 0.86150.96320.73520.70042.24831.08741.2721.82961.32771.0456
SGI 2.5221.07730.92010.83621.53571.12281.01341.07081.2140.95
DEPI 0.97961.01921.15730.86591.00930.91771.02381.01650.97311.0765
SGAI 0.45011.0041.05461.4270.73850.9221.09411.1310.92191.0743
LVGI 1.02891.01730.91371.22290.97191.03781.03521.01150.99881.0144
TATA -0.0556-0.0063-0.0341-0.0462-0.0564-0.04-0.0474-0.0395-0.0467-0.0416
M-score -1.67-2.39-3.22-1.96-1.76-2.76-2.41-2.32-2.77-2.67

Magellan Midstream Partners LP Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.02290.67530.82510.74880.59930.89660.89261.04311.06720.9636
GMI 0.8880.91480.96340.95930.93270.98390.96690.97690.96860.9577
AQI 1.82961.89752.02591.80421.32771.12070.91870.89971.04561.0429
SGI 1.09911.24721.28211.24181.21181.06471.03511.02410.93070.9622
DEPI 1.01651.02460.95880.94030.97310.97261.12571.13461.07651.0938
SGAI 1.10190.95190.90530.91330.92351.01770.99351.0011.09661.0941
LVGI 1.01151.01761.02561.01060.99881.00321.01831.01561.01441.0298
TATA -0.0396-0.0319-0.0402-0.0339-0.048-0.0436-0.0412-0.043-0.0421-0.0436
M-score -2.30-2.38-2.18-2.35-2.78-2.69-2.78-2.66-2.69-2.77
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