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Marathon Oil Corp (NYSE:MRO)
Beneish M-Score
-3.10 (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 -3.10 suggests that the company is not a manipulator.

MRO' s 10-Year Beneish M-Score Range
Min: -4.38   Max: 0.55
Current: -3.1

-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 * 0.7575+0.528 * 1.0059+0.404 * 0.8316+0.892 * 1.0552+0.115 * 0.9239
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0557+4.679 * -0.0835-0.327 * 0.9244
=-3.10

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $2,048 Mil.
Revenue was 2971 + 2941 + 3529 + 5726 = $15,167 Mil.
Gross Profit was 1725 + 1664 + 2262 + 4382 = $10,033 Mil.
Total Current Assets was $4,204 Mil.
Total Assets was $36,700 Mil.
Property, Plant and Equipment(Net PPE) was $28,658 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,936 Mil.
Selling, General & Admin. Expense(SGA) was $713 Mil.
Total Current Liabilities was $4,176 Mil.
Long-Term Debt was $6,355 Mil.
Net Income was 431 + 540 + 1149 + 375 = $2,495 Mil.
Non Operating Income was 0 + 0 + 0 + -3 = $-3 Mil.
Cash Flow from Operations was 1774 + 1088 + 1470 + 1229 = $5,561 Mil.
Accounts Receivable was $2,562 Mil.
Revenue was 3127 + 2990 + 4020 + 4236 = $14,373 Mil.
Gross Profit was 1809 + 1874 + 2916 + 2965 = $9,564 Mil.
Total Current Assets was $3,455 Mil.
Total Assets was $35,776 Mil.
Property, Plant and Equipment(Net PPE) was $27,822 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,613 Mil.
Selling, General & Admin. Expense(SGA) was $640 Mil.
Total Current Liabilities was $4,673 Mil.
Long-Term Debt was $6,433 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)
=(2048 / 15167) / (2562 / 14373)
=0.13503 / 0.17825089
=0.7575

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)
=(1664 / 14373) / (1725 / 15167)
=0.66541432 / 0.66150195
=1.0059

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 - (4204 + 28658) / 36700) / (1 - (3455 + 27822) / 35776)
=0.10457766 / 0.1257547
=0.8316

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
=15167 / 14373
=1.0552

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))
=(2613 / (2613 + 27822)) / (2936 / (2936 + 28658))
=0.0858551 / 0.09292904
=0.9239

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)
=(713 / 15167) / (640 / 14373)
=0.04700996 / 0.04452793
=1.0557

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)
=((6355 + 4176) / 36700) / ((6433 + 4673) / 35776)
=0.28694823 / 0.31043157
=0.9244

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
=(2495 - -3 - 5561) / 36700
=-0.0835

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 -3.10 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 1.07070.79721.16531.35260.46352.18030.93181.53151.17410.9686
GMI 1.04180.58810.73781.11371.47411.07491.0050.26060.86930.9803
AQI 0.87611.22790.91941.32240.65150.80010.86831.13571.02991.3632
SGI 1.22991.3861.03910.99631.19820.69291.35990.20761.06140.9222
DEPI 1.02271.12610.99311.36150.90910.8940.89591.0261.01920.8935
SGAI 0.90590.8131.32731.12220.64761.31890.79361.92280.96121.3423
LVGI 0.93391.04630.86741.12480.85681.06941.00640.77251.1360.9171
TATA -0.1054-0.0725-0.025-0.0792-0.0762-0.0789-0.0722-0.1199-0.069-0.0987
M-score -2.69-2.76-2.59-2.36-2.95-2.17-2.59-3.68-2.68-2.95

Marathon Oil Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 4.68064.61172.50031.07431.19541.10270.91340.94960.84040.7575
GMI 0.2990.35340.4690.84940.88280.94940.95771.01991.03691.0059
AQI 0.93270.88551.02990.88011.32421.41331.36320.96720.8810.8316
SGI 0.24430.32640.49841.04430.99840.910.97790.94880.99451.0552
DEPI 1.57861.45481.01920.85880.91590.91110.89350.9540.9230.9239
SGAI 1.77971.73561.46511.10291.20881.25141.28241.24321.10031.0557
LVGI 0.98381.1311.1361.09131.04330.94940.91710.93630.9660.9244
TATA -0.0761-0.0694-0.069-0.0839-0.0842-0.0918-0.0987-0.0744-0.0778-0.0835
M-score -0.58-0.59-2.26-2.96-2.69-2.79-2.95-2.95-3.04-3.10
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