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Marathon Oil Corp (NYSE:MRO)
Beneish M-Score
-3.09 (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.

Marathon Oil Corp has a M-score of -3.12 suggests that the company is not a manipulator.

MRO' s 10-Year Beneish M-Score Range
Min: -4.38   Max: 0.55
Current: -3.09

-4.38
0.55

During the past 13 years, the highest Beneish M-Score of Marathon Oil Corp was 0.55. The lowest was -4.38. And the median was -2.68.


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 Marathon Oil Corp 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 * 0.861+0.528 * 1.072+0.404 * 0.5227+0.892 * 0.941+0.115 * 0.9096
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0484+4.679 * -0.0683-0.327 * 0.8946
=-3.12

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $1,729 Mil.
Revenue was 2497 + 2971 + 2941 + 3529 = $11,938 Mil.
Gross Profit was 1394 + 1725 + 1664 + 2262 = $7,045 Mil.
Total Current Assets was $4,593 Mil.
Total Assets was $36,011 Mil.
Property, Plant and Equipment(Net PPE) was $29,040 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,861 Mil.
Selling, General & Admin. Expense(SGA) was $659 Mil.
Total Current Liabilities was $4,379 Mil.
Long-Term Debt was $5,323 Mil.
Net Income was 926 + 431 + 540 + 1149 = $3,046 Mil.
Non Operating Income was 20 + 0 + 0 + 0 = $20 Mil.
Cash Flow from Operations was 1155 + 1774 + 1088 + 1470 = $5,487 Mil.
Accounts Receivable was $2,134 Mil.
Revenue was 2550 + 3127 + 2990 + 4020 = $12,687 Mil.
Gross Profit was 1427 + 1809 + 1874 + 2916 = $8,026 Mil.
Total Current Assets was $2,975 Mil.
Total Assets was $35,620 Mil.
Property, Plant and Equipment(Net PPE) was $28,145 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,500 Mil.
Selling, General & Admin. Expense(SGA) was $668 Mil.
Total Current Liabilities was $4,333 Mil.
Long-Term Debt was $6,394 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)
=(1729 / 11938) / (2134 / 12687)
=0.14483163 / 0.16820367
=0.861

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)
=(1725 / 12687) / (1394 / 11938)
=0.63261606 / 0.59013235
=1.072

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 - (4593 + 29040) / 36011) / (1 - (2975 + 28145) / 35620)
=0.06603538 / 0.12633352
=0.5227

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
=11938 / 12687
=0.941

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))
=(2500 / (2500 + 28145)) / (2861 / (2861 + 29040))
=0.08157938 / 0.08968371
=0.9096

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)
=(659 / 11938) / (668 / 12687)
=0.05520188 / 0.05265232
=1.0484

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)
=((5323 + 4379) / 36011) / ((6394 + 4333) / 35620)
=0.26941768 / 0.30115104
=0.8946

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
=(3046 - 20 - 5487) / 36011
=-0.0683

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.

Marathon Oil Corp has a M-score of -3.12 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.

Marathon Oil Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.79721.16531.35260.46352.17765.33550.26781.18831.2150.848
GMI 0.58810.73781.11371.47411.07120.24631.06690.86161.10051.0617
AQI 1.22790.91941.32240.65150.80010.86831.13571.02991.36320.5227
SGI 1.3861.03910.99631.19820.69060.23861.18711.06140.72640.9554
DEPI 1.12610.99311.36150.90910.90011.25020.73031.01960.98740.9096
SGAI 0.8131.32731.12220.64761.32331.62940.93331.21051.29791.0387
LVGI 1.04630.86741.12480.85681.06941.00640.77251.1360.91710.8946
TATA -0.0725-0.025-0.0792-0.0762-0.0883-0.0642-0.1052-0.0688-0.0986-0.0683
M-score -2.76-2.59-2.36-2.95-2.22-0.00-3.33-2.71-2.81-3.12

Marathon Oil Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.421.18831.07431.19541.10271.12841.19691.06020.95820.861
GMI 0.90850.86210.84640.88130.9521.05671.14031.16731.13081.072
AQI 0.88551.02990.88011.32421.41331.36320.96720.8810.83160.5227
SGI 1.06011.06141.04430.99840.910.78210.75280.78840.83430.941
DEPI 1.34861.01960.94540.91620.91140.98741.05551.01731.01540.9096
SGAI 1.17471.19841.19271.20531.11371.23421.29641.19331.21821.0484
LVGI 1.1311.1361.09131.04330.94940.91710.93630.9660.92440.8946
TATA -0.0485-0.0688-0.0859-0.088-0.0989-0.0986-0.0744-0.0778-0.0834-0.0683
M-score -2.39-2.71-2.97-2.70-2.80-2.86-2.83-2.96-3.07-3.12
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