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Magellan Midstream Partners LP (NYSE:MMP)
Beneish M-Score
-2.57 (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 -2.57 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: -2.57

-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 -2.37.


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 * 1.1298+0.528 * 0.9484+0.404 * 1.0726+0.892 * 0.9752+0.115 * 1.0273
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.066+4.679 * -0.0371-0.327 * 1.0275
=-2.57

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $93 Mil.
Revenue was 518.897 + 519.816 + 601.588 + 577.232 = $2,218 Mil.
Gross Profit was 289.032 + 282.998 + 312.455 + 353.804 = $1,238 Mil.
Total Current Assets was $386 Mil.
Total Assets was $6,448 Mil.
Property, Plant and Equipment(Net PPE) was $5,042 Mil.
Depreciation, Depletion and Amortization(DDA) was $172 Mil.
Selling, General & Admin. Expense(SGA) was $153 Mil.
Total Current Liabilities was $714 Mil.
Long-Term Debt was $3,575 Mil.
Net Income was 187.859 + 207.07 + 203.483 + 252.706 = $851 Mil.
Non Operating Income was 3.169 + 29.17 + -1.672 + -2.346 = $28 Mil.
Cash Flow from Operations was 197.5 + 209.568 + 345.588 + 309.285 = $1,062 Mil.
Accounts Receivable was $85 Mil.
Revenue was 498.428 + 530.302 + 723.699 + 521.601 = $2,274 Mil.
Gross Profit was 261.603 + 287.416 + 357.705 + 297.623 = $1,204 Mil.
Total Current Assets was $333 Mil.
Total Assets was $5,732 Mil.
Property, Plant and Equipment(Net PPE) was $4,553 Mil.
Depreciation, Depletion and Amortization(DDA) was $159 Mil.
Selling, General & Admin. Expense(SGA) was $147 Mil.
Total Current Liabilities was $383 Mil.
Long-Term Debt was $3,327 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)
=(93.329 / 2217.533) / (84.715 / 2274.03)
=0.04208686 / 0.03725325
=1.1298

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)
=(1204.347 / 2274.03) / (1238.289 / 2217.533)
=0.52960911 / 0.55840838
=0.9484

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 - (385.582 + 5041.93) / 6448.204) / (1 - (332.701 + 4553.473) / 5732.056)
=0.1582909 / 0.14757044
=1.0726

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
=2217.533 / 2274.03
=0.9752

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))
=(159.47 / (159.47 + 4553.473)) / (171.731 / (171.731 + 5041.93))
=0.03383661 / 0.03293866
=1.0273

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)
=(153.305 / 2217.533) / (147.484 / 2274.03)
=0.06913313 / 0.06485578
=1.066

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)
=((3574.898 + 713.662) / 6448.204) / ((3326.936 + 383.205) / 5732.056)
=0.66507821 / 0.64726182
=1.0275

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
=(851.118 - 28.321 - 1061.941) / 6448.204
=-0.0371

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 -2.57 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 0.88371.120.64682.32780.82260.7971.23731.02290.59931.0712
GMI 0.93480.92780.780.89871.20560.92550.94830.8880.93270.965
AQI 0.86150.96320.73520.70042.24831.08741.2721.82961.32771.0456
SGI 1.07611.0780.92010.83561.53571.12281.01341.09911.21180.9272
DEPI 0.97960.82831.17891.03471.03320.91961.00911.01650.97311.0765
SGAI 1.02021.03471.06431.37210.73850.9221.09411.10190.92351.1007
LVGI 1.02891.01730.91371.22290.97191.03781.03521.01150.99881.0144
TATA -0.0556-0.1138-0.1462-0.0691-0.0301-0.0405-0.0472-0.0396-0.0471-0.0416
M-score -2.88-2.92-3.75-2.04-1.64-2.76-2.41-2.30-2.77-2.69

Magellan Midstream Partners LP Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.67530.82510.74880.59930.89660.88831.03821.0620.95891.1298
GMI 0.91480.96340.95930.93270.98390.97160.98140.97340.96250.9484
AQI 1.89752.02591.80421.32771.12070.91870.89971.04561.04291.0726
SGI 1.24721.28211.24181.21181.06471.04011.02890.93530.9670.9752
DEPI 1.02460.95880.94030.97310.97261.12571.13461.07651.09381.0273
SGAI 0.95190.90530.91330.92351.01770.98870.99641.09111.08871.066
LVGI 1.01761.02561.01060.99881.00321.01831.01561.01441.02981.0275
TATA -0.0319-0.0402-0.0339-0.048-0.0436-0.0414-0.0431-0.0422-0.0437-0.0371
M-score -2.38-2.18-2.35-2.78-2.69-2.78-2.66-2.69-2.77-2.57
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