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Magellan Midstream Partners LP (NYSE:MMP)
Beneish M-Score
-2.69 (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 -2.69 suggests that the company is not a manipulator.

MMP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.64   Max: -1.64
Current: -2.69

-3.64
-1.64

During the past 13 years, the highest Beneish M-Score of Magellan Midstream Partners LP was -1.64. The lowest was -3.64. And the median was -2.42.


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 * 1.0712+0.528 * 0.965+0.404 * 1.0456+0.892 * 0.9272+0.115 * 1.0765
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1007+4.679 * -0.042-0.327 * 1.0144
=-2.69

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $84 Mil.
Revenue was 601.588 + 577.232 + 487.543 + 522.09 = $2,188 Mil.
Gross Profit was 312.455 + 353.804 + 261.603 + 287.416 = $1,215 Mil.
Total Current Assets was $339 Mil.
Total Assets was $6,042 Mil.
Property, Plant and Equipment(Net PPE) was $4,819 Mil.
Depreciation, Depletion and Amortization(DDA) was $167 Mil.
Selling, General & Admin. Expense(SGA) was $151 Mil.
Total Current Liabilities was $713 Mil.
Long-Term Debt was $3,189 Mil.
Net Income was 203.483 + 252.706 + 177.391 + 183.636 = $817 Mil.
Non Operating Income was -1.672 + -2.346 + 5.899 + -0.866 = $1 Mil.
Cash Flow from Operations was 345.588 + 309.285 + 223.736 + 191.083 = $1,070 Mil.
Accounts Receivable was $84 Mil.
Revenue was 723.699 + 521.601 + 496.446 + 618.606 = $2,360 Mil.
Gross Profit was 357.705 + 297.623 + 262.469 + 347.069 = $1,265 Mil.
Total Current Assets was $403 Mil.
Total Assets was $5,501 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 $2,967 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)
=(83.893 / 2188.453) / (84.465 / 2360.352)
=0.03833439 / 0.03578492
=1.0712

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)
=(353.804 / 2360.352) / (312.455 / 2188.453)
=0.53588024 / 0.55531373
=0.965

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 - (338.854 + 4819.229) / 6041.567) / (1 - (402.667 + 4329.334) / 5501.409)
=0.14623425 / 0.13985653
=1.0456

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
=2188.453 / 2360.352
=0.9272

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))
=(161.741 / (161.741 + 4329.334)) / (166.812 / (166.812 + 4819.229))
=0.03601387 / 0.0334558
=1.0765

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)
=(151.329 / 2188.453) / (148.288 / 2360.352)
=0.06914885 / 0.06282453
=1.1007

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)
=((3189.287 + 713.072) / 6041.567) / ((2967.019 + 536.155) / 5501.409)
=0.64591835 / 0.6367776
=1.0144

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
=(817.216 - 1.015 - 1069.692) / 6041.567
=-0.042

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 -2.69 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

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 12.35921.02290.67530.82510.74880.59930.89990.89591.04681.0712
GMI 0.81940.8880.91480.96340.95930.93270.98040.96340.97340.965
AQI 1.72491.82961.89752.02591.80421.32771.12070.91870.89971.0456
SGI 1.03851.09911.24721.28211.24181.21181.06091.03131.02050.9272
DEPI 0.99621.01651.02460.95880.94030.97310.97261.12571.13461.0765
SGAI 1.18051.10190.95190.90530.91330.92351.02140.99711.00461.1007
LVGI 1.03271.01151.01761.02561.01060.99881.00321.01831.01561.0144
TATA -0.0467-0.0396-0.0319-0.0402-0.0339-0.048-0.0435-0.0411-0.0429-0.042
M-score 7.94-2.30-2.38-2.18-2.35-2.78-2.69-2.78-2.66-2.69
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