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Magellan Midstream Partners, L.P. (NYSE:MMP)
Beneish M-Score
-2.26 (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 -2.26 suggests that the company is not a manipulator.

MMP' s 10-Year Beneish M-Score Range
Min: -3.59   Max: -1.67
Current: -2.26

-3.59
-1.67

During the past 13 years, the highest Beneish M-Score of Magellan Midstream Partners, L.P. was -1.67. The lowest was -3.59. And the median was -2.47.


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 * 1.1082+0.528 * 0.8651+0.404 * 1.8296+0.892 * 1.0708+0.115 * 1.0165
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.131+4.679 * -0.0396-0.327 * 1.0115
=-2.26

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $123 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.
Net Income was 190.007 + 125.623 + 153.64 + 112.967 = $582 Mil.
Non Operating Income was 1.62 + -0.54 + -0.54 + 0 = $1 Mil.
Cash Flow from Operations was 251.459 + 179.234 + 172.229 + 169.778 = $773 Mil.
Accounts Receivable was $103 Mil.
Revenue was 503.195 + 325.869 + 449.527 + 493.483 = $1,772 Mil.
Gross Profit was 250.612 + 136.778 + 222.703 + 176.419 = $787 Mil.
Total Current Assets was $700 Mil.
Total Assets was $4,420 Mil.
Property, Plant and Equipment(Net PPE) was $3,465 Mil.
Depreciation, Depletion and Amortization(DDA) was $128 Mil.
Selling, General & Admin. Expense(SGA) was $109 Mil.
Total Current Liabilities was $393 Mil.
Long-Term Debt was $2,393 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)
=(122.757 / 1897.606) / (103.443 / 1772.074)
=0.06469046 / 0.05837397
=1.1082

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)
=(220.274 / 1772.074) / (295.222 / 1897.606)
=0.443837 / 0.51301851
=0.8651

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 - (396.733 + 3916.258) / 4820.812) / (1 - (700.278 + 3465.302) / 4420.067)
=0.10533931 / 0.05757537
=1.8296

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
=1897.606 / 1772.074
=1.0708

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))
=(128.012 / (128.012 + 3465.302)) / (142.23 / (142.23 + 3916.258))
=0.03562505 / 0.03504507
=1.0165

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)
=(132.496 / 1897.606) / (109.403 / 1772.074)
=0.06982271 / 0.06173726
=1.131

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)
=((2435.316 + 638.276) / 4820.812) / ((2393.408 + 392.62) / 4420.067)
=0.63756728 / 0.63031352
=1.0115

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
=(582.237 - 0.54 - 772.7) / 4820.812
=-0.0396

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 -2.26 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.03370.57361.00661.0450.72651.970.78890.83821.10261.1082
GMI 1.20381.32320.93480.93060.77770.89871.20560.92550.94830.8651
AQI 0.81470.91090.86150.96320.73520.70042.24831.08741.2721.8296
SGI 1.43331.63521.07611.07730.92070.83561.53571.12281.01341.0708
DEPI 1.36120.82290.98591.02910.98071.04351.03320.91961.00911.0165
SGAI 0.67340.65521.02021.0041.09681.37210.73850.9221.09411.131
LVGI 0.9290.98191.02891.01730.91371.22290.97191.03781.03521.0115
TATA -0.0595-0.0351-0.0587-0.0093-0.1443-0.0455-0.0301-0.0405-0.0474-0.0395
M-score -2.19-2.29-2.79-2.47-3.69-2.25-1.67-2.72-2.54-2.26

Magellan Midstream Partners, L.P. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.95560.83821.00110.92431.13111.10261.09611.11340.95791.1082
GMI 0.90820.92550.92940.95771.02480.94830.8650.84630.81940.8651
AQI 2.20771.08741.11021.10531.2841.2721.42591.67011.72491.8296
SGI 1.09791.12281.0771.14381.05761.01340.9510.91421.03851.0708
DEPI 0.9180.91960.91520.95451.00631.00911.00880.99580.98711.0165
SGAI 1.00130.9220.93970.84151.00721.09411.24391.37981.18051.131
LVGI 1.04851.03781.0030.99861.00221.03521.04221.03171.03271.0115
TATA -0.0362-0.0398-0.025-0.0597-0.0406-0.0475-0.0614-0.0406-0.0459-0.0396
M-score -2.19-2.72-2.52-2.66-2.37-2.54-2.68-2.53-2.54-2.26
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