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Marathon Oil Corp (NYSE:MRO)
Beneish M-Score
-3.33 (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 -3.33 suggests that the company is not a manipulator.

MRO' s Beneish M-Score Range Over the Past 10 Years
Min: -4.37   Max: 0.55
Current: -3.33

-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 -2.62.


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 * 1.1415+0.528 * 1.0802+0.404 * 1.2215+0.892 * 0.5089+0.115 * 1.0096
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.7556+4.679 * -0.1129-0.327 * 1.0472
=-3.33

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $779 Mil.
Revenue was 730 + 1475 + 1323 + 1531 = $5,059 Mil.
Gross Profit was 235 + 826 + 740 + 818 = $2,619 Mil.
Total Current Assets was $3,268 Mil.
Total Assets was $32,868 Mil.
Property, Plant and Equipment(Net PPE) was $26,737 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,745 Mil.
Selling, General & Admin. Expense(SGA) was $570 Mil.
Total Current Liabilities was $1,526 Mil.
Long-Term Debt was $7,280 Mil.
Net Income was -407 + -793 + -749 + -386 = $-2,335 Mil.
Non Operating Income was 0 + 45 + 0 + 0 = $45 Mil.
Cash Flow from Operations was 74 + 352 + 496 + 408 = $1,330 Mil.
Accounts Receivable was $1,341 Mil.
Revenue was 1532 + 2497 + 2971 + 2941 = $9,941 Mil.
Gross Profit was 776 + 1394 + 1725 + 1664 = $5,559 Mil.
Total Current Assets was $2,968 Mil.
Total Assets was $34,736 Mil.
Property, Plant and Equipment(Net PPE) was $29,291 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,039 Mil.
Selling, General & Admin. Expense(SGA) was $638 Mil.
Total Current Liabilities was $3,561 Mil.
Long-Term Debt was $5,326 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)
=(779 / 5059) / (1341 / 9941)
=0.153983 / 0.13489589
=1.1415

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)
=(5559 / 9941) / (2619 / 5059)
=0.55919928 / 0.51769124
=1.0802

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 - (3268 + 26737) / 32868) / (1 - (2968 + 29291) / 34736)
=0.087106 / 0.0713093
=1.2215

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
=5059 / 9941
=0.5089

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))
=(3039 / (3039 + 29291)) / (2745 / (2745 + 26737))
=0.09399938 / 0.09310766
=1.0096

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)
=(570 / 5059) / (638 / 9941)
=0.11267049 / 0.06417865
=1.7556

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)
=((7280 + 1526) / 32868) / ((5326 + 3561) / 34736)
=0.26792017 / 0.25584408
=1.0472

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
=(-2335 - 45 - 1330) / 32868
=-0.1129

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 -3.33 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.10011.47250.41982.18240.93611.55951.1670.9571.07661.0132
GMI 0.79231.13240.68351.58061.01280.26850.80570.98031.18141.0618
AQI 0.91941.32240.65150.80010.86831.13571.02991.36320.5171.2606
SGI 1.10070.91511.3230.68911.35990.20761.06140.92220.75260.5206
DEPI 0.99311.36150.890.91320.89591.0261.01920.89351.00560.9104
SGAI 0.96341.18081.06920.97650.79361.92280.96121.34231.26491.7329
LVGI 0.86741.12480.85681.06941.00640.77251.1360.91710.89271.0366
TATA -0.0071-0.0639-0.0762-0.0789-0.0722-0.1052-0.069-0.0987-0.0684-0.118
M-score -2.42-2.25-3.37-1.84-2.58-3.58-2.72-2.96-3.06-3.46

Marathon Oil Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.86860.97540.85080.75180.91310.69910.78660.79521.01321.1415
GMI 0.92441.04031.05740.99351.1051.05161.03581.05741.06181.0802
AQI 1.36320.96720.8810.83160.5170.87740.650.79861.26061.2215
SGI 1.01610.92380.98241.06330.88740.86320.7440.60850.52060.5089
DEPI 0.81290.89810.84560.84610.90960.83560.87510.84830.91041.0096
SGAI 0.98271.08410.98230.98241.10331.08211.35231.52731.73291.7556
LVGI 0.91710.93630.9660.92440.89270.86391.00821.02221.03661.0472
TATA -0.0992-0.0749-0.0783-0.084-0.0687-0.0788-0.0834-0.0832-0.118-0.1129
M-score -2.94-2.92-3.02-3.11-3.11-3.26-3.50-3.57-3.46-3.33
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