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Marathon Oil Corp (NYSE:MRO)
Beneish M-Score
-2.91 (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 -2.91 suggests that the company is not a manipulator.

MRO' s 10-Year Beneish M-Score Range
Min: -3.96   Max: -2.05
Current: -2.91

-3.96
-2.05

During the past 13 years, the highest Beneish M-Score of Marathon Oil Corp was -2.05. The lowest was -3.96. And the median was -2.65.


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 * 0.957+0.528 * 0.9884+0.404 * 1.3632+0.892 * 0.9222+0.115 * 0.8932
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0765+4.679 * -0.0987-0.327 * 0.9171
=-2.91

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $2,134 Mil.
Revenue was 3041 + 3914 + 3898 + 4106 = $14,959 Mil.
Gross Profit was 1877 + 2549 + 2703 + 2988 = $10,117 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 $2,790 Mil.
Selling, General & Admin. Expense(SGA) was $687 Mil.
Total Current Liabilities was $4,333 Mil.
Long-Term Debt was $6,394 Mil.
Net Income was 375 + 569 + 426 + 383 = $1,753 Mil.
Non Operating Income was -3 + 0 + 0 + 0 = $-3 Mil.
Cash Flow from Operations was 1229 + 1645 + 868 + 1528 = $5,270 Mil.
Accounts Receivable was $2,418 Mil.
Revenue was 4236 + 4161 + 3784 + 4040 = $16,221 Mil.
Gross Profit was 2995 + 2819 + 2437 + 2592 = $10,843 Mil.
Total Current Assets was $3,762 Mil.
Total Assets was $35,306 Mil.
Property, Plant and Equipment(Net PPE) was $28,272 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,477 Mil.
Selling, General & Admin. Expense(SGA) was $692 Mil.
Total Current Liabilities was $5,081 Mil.
Long-Term Debt was $6,512 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)
=(2134 / 14959) / (2418 / 16221)
=0.14265659 / 0.14906603
=0.957

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)
=(2549 / 16221) / (1877 / 14959)
=0.66845447 / 0.67631526
=0.9884

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 - (2975 + 28145) / 35620) / (1 - (3762 + 28272) / 35306)
=0.12633352 / 0.09267547
=1.3632

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
=14959 / 16221
=0.9222

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))
=(2477 / (2477 + 28272)) / (2790 / (2790 + 28145))
=0.08055547 / 0.09018911
=0.8932

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)
=(687 / 14959) / (692 / 16221)
=0.04592553 / 0.04266075
=1.0765

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)
=((6394 + 4333) / 35620) / ((6512 + 5081) / 35306)
=0.30115104 / 0.32835779
=0.9171

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
=(1753 - -3 - 5270) / 35620
=-0.0987

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 -2.91 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 1.03960.78821.14621.37670.45542.17765.33550.27271.1670.957
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 -2.72-2.76-2.61-2.34-2.95-2.22-0.00-3.33-2.73-2.91

Marathon Oil Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.81910.54970.28741.021.41141.1671.05191.11370.97280.957
GMI 0.36960.53541.01620.96790.90850.86210.84540.86460.91370.9884
AQI 1.06611.13571.26940.93270.88551.02990.88011.32421.41331.3632
SGI 0.38790.58891.18481.0981.06011.06141.04991.06281.02280.9222
DEPI 0.56050.73030.74591.35751.34861.01960.93660.84820.82790.8932
SGAI 1.61561.34460.90820.99881.17471.19841.18981.14351.01451.0765
LVGI 0.79740.77250.76020.98381.1311.1361.09131.04330.94940.9171
TATA -0.1672-0.1052-0.076-0.0575-0.0485-0.0688-0.0859-0.088-0.0989-0.0987
M-score -4.37-3.96-3.14-2.64-2.40-2.73-2.99-2.73-2.83-2.91
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