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Marathon Oil Corp (NYSE:MRO)
Beneish M-Score
-3.00 (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 -3.00 suggests that the company is not a manipulator.

MRO' s 10-Year Beneish M-Score Range
Min: -4.37   Max: 0.55
Current: -3

-4.37
0.55

During the past 13 years, the highest Beneish M-Score of Marathon Oil Corp was 0.55. The lowest was -4.37. And the median was -2.67.


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 * 0.9593+0.528 * 1.1063+0.404 * 0.881+0.892 * 0.8714+0.115 * 0.9227
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0991+4.679 * -0.0778-0.327 * 0.966
=-3.00

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,042 Mil.
Revenue was 2941 + 3529 + 3041 + 3914 = $13,425 Mil.
Gross Profit was 1664 + 2262 + 1877 + 2549 = $8,352 Mil.
Total Current Assets was $4,218 Mil.
Total Assets was $35,935 Mil.
Property, Plant and Equipment(Net PPE) was $27,824 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,856 Mil.
Selling, General & Admin. Expense(SGA) was $680 Mil.
Total Current Liabilities was $3,974 Mil.
Long-Term Debt was $6,362 Mil.
Net Income was 540 + 1149 + 375 + 569 = $2,633 Mil.
Non Operating Income was 0 + 0 + -3 + 0 = $-3 Mil.
Cash Flow from Operations was 1088 + 1470 + 1229 + 1645 = $5,432 Mil.
Accounts Receivable was $2,443 Mil.
Revenue was 2990 + 4020 + 4236 + 4161 = $15,407 Mil.
Gross Profit was 1874 + 2916 + 2995 + 2819 = $10,604 Mil.
Total Current Assets was $3,281 Mil.
Total Assets was $35,048 Mil.
Property, Plant and Equipment(Net PPE) was $27,457 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,580 Mil.
Selling, General & Admin. Expense(SGA) was $710 Mil.
Total Current Liabilities was $4,008 Mil.
Long-Term Debt was $6,428 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)
=(2042 / 13425) / (2443 / 15407)
=0.15210428 / 0.15856429
=0.9593

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)
=(2262 / 15407) / (1664 / 13425)
=0.68825858 / 0.62212291
=1.1063

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 - (4218 + 27824) / 35935) / (1 - (3281 + 27457) / 35048)
=0.10833449 / 0.12297421
=0.881

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
=13425 / 15407
=0.8714

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))
=(2580 / (2580 + 27457)) / (2856 / (2856 + 27824))
=0.08589406 / 0.09308996
=0.9227

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)
=(680 / 13425) / (710 / 15407)
=0.05065177 / 0.04608295
=1.0991

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)
=((6362 + 3974) / 35935) / ((6428 + 4008) / 35048)
=0.28763044 / 0.29776307
=0.966

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
=(2633 - -3 - 5432) / 35935
=-0.0778

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 -3.00 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.07070.79721.16531.35260.46352.17765.33550.26781.18830.957
GMI 1.04180.58810.73781.11371.47411.07120.24631.06690.86160.989
AQI 0.87611.22790.91941.32240.65150.80010.86831.13571.02991.3632
SGI 1.22991.3861.03910.99631.19820.69060.23861.18711.06140.9222
DEPI 1.02271.12610.99311.36150.90910.90011.25020.73031.01960.8932
SGAI 0.90590.8131.32731.12220.64761.32331.62940.93331.21051.0657
LVGI 0.93391.04630.86741.12480.85681.06941.00640.77251.1360.9171
TATA -0.1054-0.0725-0.025-0.0792-0.0762-0.0883-0.0642-0.1052-0.0688-0.0987
M-score -2.69-2.76-2.59-2.36-2.95-2.22-0.00-3.33-2.71-2.91

Marathon Oil Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.28291.04151.421.18831.07431.19541.04551.02511.08340.9593
GMI 1.01620.96790.90850.86210.84640.88130.93231.01291.08471.1063
AQI 1.26940.93270.88551.02990.88011.32421.41331.36320.96720.881
SGI 1.18481.0981.06011.06141.04430.99840.95990.86090.83170.8714
DEPI 0.74591.35751.34861.01960.94540.91620.82790.89320.95370.9227
SGAI 0.90820.99881.17471.19841.19271.20531.071.14141.19391.0991
LVGI 0.76020.98381.1311.1361.09131.04330.94940.91710.93630.966
TATA -0.076-0.0575-0.0485-0.0688-0.0859-0.088-0.0989-0.0987-0.0744-0.0778
M-score -3.15-2.62-2.39-2.71-2.97-2.70-2.82-2.90-2.89-3.00
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