Switch to:
GuruFocus has detected 6 Warning Signs with Magellan Midstream Partners LP $MMP.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Magellan Midstream Partners LP (NYSE:MMP)
Beneish M-Score
-2.31 (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 -2.31 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: -2.31

-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 -2.37.


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 * 1.2501+0.528 * 1.0358+0.404 * 1.137+0.892 * 1.0077+0.115 * 1.0243
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9693+4.679 * -0.0292-0.327 * 1.0445
=-2.31

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $106 Mil.
Revenue was 614.915 + 551.782 + 518.897 + 519.816 = $2,205 Mil.
Gross Profit was 312.029 + 298.254 + 289.032 + 282.998 = $1,182 Mil.
Total Current Assets was $370 Mil.
Total Assets was $6,772 Mil.
Property, Plant and Equipment(Net PPE) was $5,276 Mil.
Depreciation, Depletion and Amortization(DDA) was $178 Mil.
Selling, General & Admin. Expense(SGA) was $148 Mil.
Total Current Liabilities was $482 Mil.
Long-Term Debt was $4,087 Mil.
Net Income was 213.291 + 194.551 + 187.859 + 207.07 = $803 Mil.
Non Operating Income was 0.684 + 3.324 + 3.169 + 29.17 = $36 Mil.
Cash Flow from Operations was 325.045 + 231.927 + 197.5 + 209.568 = $964 Mil.
Accounts Receivable was $84 Mil.
Revenue was 573.048 + 586.675 + 498.428 + 530.302 = $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.



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)
=(105.689 / 2205.41) / (83.893 / 2188.453)
=0.04792261 / 0.03833439
=1.2501

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)
=(1215.278 / 2188.453) / (1182.313 / 2205.41)
=0.55531373 / 0.53609669
=1.0358

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 - (370.394 + 5275.741) / 6772.073) / (1 - (338.854 + 4819.229) / 6041.567)
=0.16626194 / 0.14623425
=1.137

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
=2205.41 / 2188.453
=1.0077

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))
=(166.812 / (166.812 + 4819.229)) / (178.142 / (178.142 + 5275.741))
=0.0334558 / 0.03266333
=1.0243

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)
=(147.815 / 2205.41) / (151.329 / 2188.453)
=0.06702382 / 0.06914885
=0.9693

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)
=((4087.192 + 481.656) / 6772.073) / ((3189.287 + 713.072) / 6041.567)
=0.67466018 / 0.64591835
=1.0445

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
=(802.771 - 36.347 - 964.04) / 6772.073
=-0.0292

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 -2.31 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 local exchange's currency.

Magellan Midstream Partners LP Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.120.64682.32780.82260.7971.23731.02290.59931.07121.2501
GMI 0.92780.780.89871.20560.92550.94830.8880.93270.9651.0358
AQI 0.96320.73520.70042.24831.08741.2721.82961.32771.04561.137
SGI 1.0780.92010.83561.53571.12281.01341.09911.21180.92721.0077
DEPI 0.82831.17891.03471.03320.91961.00911.01650.97311.07651.0243
SGAI 1.03471.06431.37210.73850.9221.09411.10190.92351.10070.9693
LVGI 1.01730.91371.22290.97191.03781.03521.01150.99881.01441.0445
TATA -0.1138-0.1462-0.0691-0.0301-0.0405-0.0472-0.0396-0.0471-0.0416-0.0292
M-score -2.92-3.75-2.04-1.64-2.76-2.41-2.30-2.77-2.69-2.31

Magellan Midstream Partners LP Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.74880.59930.89660.88831.0341.07120.96731.13961.19881.2501
GMI 0.95930.93270.98390.97160.98540.9650.95410.94030.98581.0358
AQI 1.80421.32771.12070.91870.89971.04561.04291.07261.00921.137
SGI 1.24181.21181.06471.04011.03310.92720.95860.96680.92491.0077
DEPI 0.94030.97310.97261.12571.13461.07651.09381.02731.02371.0243
SGAI 0.91330.92351.01770.98870.99231.10071.09821.07521.0940.9693
LVGI 1.01060.99881.00321.01831.01561.01441.02981.02751.05831.0445
TATA -0.0339-0.048-0.0436-0.0414-0.0435-0.0416-0.0432-0.0366-0.0318-0.0292
M-score -2.35-2.78-2.69-2.78-2.66-2.69-2.77-2.57-2.55-2.31
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK