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Marathon Oil Corp (NYSE:MRO)
Beneish M-Score
-3.01 (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 -3.01 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: -3.01

-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 -2.63.


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 * 1.2149+0.528 * 1.0383+0.404 * 1.3603+0.892 * 0.5662+0.115 * 1.0654
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4141+4.679 * -0.1003-0.327 * 0.9183
=-3.01

* 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 $822 Mil.
Revenue was 1302 + 730 + 1475 + 1323 = $4,830 Mil.
Gross Profit was 769 + 235 + 826 + 740 = $2,570 Mil.
Total Current Assets was $3,754 Mil.
Total Assets was $32,527 Mil.
Property, Plant and Equipment(Net PPE) was $25,657 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,555 Mil.
Selling, General & Admin. Expense(SGA) was $534 Mil.
Total Current Liabilities was $1,382 Mil.
Long-Term Debt was $7,280 Mil.
Net Income was -170 + -407 + -793 + -749 = $-2,119 Mil.
Non Operating Income was 0 + 0 + 45 + 0 = $45 Mil.
Cash Flow from Operations was 178 + 74 + 352 + 496 = $1,100 Mil.
Accounts Receivable was $1,195 Mil.
Revenue was 1531 + 1532 + 2497 + 2971 = $8,531 Mil.
Gross Profit was 818 + 776 + 1394 + 1725 = $4,713 Mil.
Total Current Assets was $4,130 Mil.
Total Assets was $35,770 Mil.
Property, Plant and Equipment(Net PPE) was $29,121 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,110 Mil.
Selling, General & Admin. Expense(SGA) was $667 Mil.
Total Current Liabilities was $3,052 Mil.
Long-Term Debt was $7,321 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)
=(822 / 4830) / (1195 / 8531)
=0.17018634 / 0.14007736
=1.2149

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)
=(4713 / 8531) / (2570 / 4830)
=0.55245575 / 0.5320911
=1.0383

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 - (3754 + 25657) / 32527) / (1 - (4130 + 29121) / 35770)
=0.09579734 / 0.07042214
=1.3603

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
=4830 / 8531
=0.5662

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))
=(3110 / (3110 + 29121)) / (2555 / (2555 + 25657))
=0.09649096 / 0.0905643
=1.0654

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)
=(534 / 4830) / (667 / 8531)
=0.11055901 / 0.07818544
=1.4141

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 + 1382) / 32527) / ((7321 + 3052) / 35770)
=0.26630184 / 0.28999161
=0.9183

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
=(-2119 - 45 - 1100) / 32527
=-0.1003

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 -3.01 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 1.16531.35260.46352.17765.33550.27271.51610.93520.8481.0132
GMI 0.73781.11371.53321.07010.2371.05580.99490.96311.06171.0618
AQI 0.91941.32240.65150.80010.86831.13571.02991.36320.5171.2606
SGI 1.03910.99631.19820.69060.23861.18710.8170.94370.95540.5206
DEPI 0.99311.36150.90910.90011.25020.73121.2370.81290.90960.9104
SGAI 1.32731.12220.64761.32331.62941.13741.24791.0331.03871.7329
LVGI 0.86741.12480.85681.06941.00640.77251.1360.91710.89271.0366
TATA -0.0074-0.0639-0.0762-0.0883-0.0642-0.105-0.0687-0.0992-0.0687-0.118
M-score -2.51-2.29-2.92-2.22-0.01-3.37-2.54-2.93-3.13-3.46

Marathon Oil Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.97540.85080.75180.91310.69910.78660.79521.01321.14151.2149
GMI 1.04031.05740.99351.1051.05161.03581.05741.06181.08021.0383
AQI 0.96720.8810.83160.5170.87740.650.79861.26061.22151.3603
SGI 0.92380.98241.06330.88740.86320.7440.60850.52060.50890.5662
DEPI 0.89810.84560.84610.90960.83560.87510.84830.91041.00961.0654
SGAI 1.08410.98230.98241.10331.08211.35231.52731.73291.75561.4141
LVGI 0.93630.9660.92440.89270.86391.00821.02221.03661.04720.9183
TATA -0.0749-0.0783-0.084-0.0687-0.0788-0.0834-0.0832-0.118-0.1129-0.1003
M-score -2.92-3.02-3.11-3.11-3.26-3.50-3.57-3.46-3.33-3.01
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