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Marathon Oil Corp (NYSE:MRO)
Beneish M-Score
-3.56 (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 -3.57 suggests that the company is not a manipulator.

MRO' s Beneish M-Score Range Over the Past 10 Years
Min: -4.29   Max: -1.35
Current: -3.56

-4.29
-1.35

During the past 13 years, the highest Beneish M-Score of Marathon Oil Corp was -1.35. The lowest was -4.29. And the median was -2.70.


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 * 0.7952+0.528 * 1.0574+0.404 * 0.7986+0.892 * 0.6085+0.115 * 0.8483
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.5273+4.679 * -0.0829-0.327 * 1.0222
=-3.57

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $991 Mil.
Revenue was 1323 + 1531 + 1532 + 2497 = $6,883 Mil.
Gross Profit was 740 + 818 + 776 + 1394 = $3,728 Mil.
Total Current Assets was $3,858 Mil.
Total Assets was $34,674 Mil.
Property, Plant and Equipment(Net PPE) was $27,920 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,090 Mil.
Selling, General & Admin. Expense(SGA) was $632 Mil.
Total Current Liabilities was $2,848 Mil.
Long-Term Debt was $7,323 Mil.
Net Income was -749 + -386 + -276 + 926 = $-485 Mil.
Non Operating Income was 0 + 0 + 0 + 20 = $20 Mil.
Cash Flow from Operations was 496 + 408 + 309 + 1155 = $2,368 Mil.
Accounts Receivable was $2,048 Mil.
Revenue was 2971 + 2941 + 2849 + 2550 = $11,311 Mil.
Gross Profit was 1725 + 1664 + 1662 + 1427 = $6,478 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 $2,646 Mil.
Selling, General & Admin. Expense(SGA) was $680 Mil.
Total Current Liabilities was $4,176 Mil.
Long-Term Debt was $6,355 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)
=(991 / 6883) / (2048 / 11311)
=0.14397792 / 0.18106268
=0.7952

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)
=(818 / 11311) / (740 / 6883)
=0.57271682 / 0.54162429
=1.0574

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 - (3858 + 27920) / 34674) / (1 - (4204 + 28658) / 36700)
=0.08352079 / 0.10457766
=0.7986

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
=6883 / 11311
=0.6085

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))
=(2646 / (2646 + 28658)) / (3090 / (3090 + 27920))
=0.08452594 / 0.09964528
=0.8483

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)
=(632 / 6883) / (680 / 11311)
=0.09182043 / 0.06011847
=1.5273

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)
=((7323 + 2848) / 34674) / ((6355 + 4176) / 36700)
=0.29333218 / 0.28694823
=1.0222

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
=(-485 - 20 - 2368) / 34674
=-0.0829

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 -3.57 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.79721.16531.35260.46352.17765.33550.26781.18831.2150.848
GMI 0.58810.73781.11371.53321.07010.2371.06690.86161.10051.0617
AQI 1.22790.91941.32240.65150.80010.86831.13571.02991.36320.5227
SGI 1.3861.03910.99631.19820.69060.23861.18711.06140.72640.9554
DEPI 1.12610.99311.36150.90910.90011.25020.73031.01960.98740.9096
SGAI 0.8131.32731.12220.64761.32331.62940.93331.21051.29791.0387
LVGI 1.04630.86741.12480.85681.06941.00640.77251.1360.91710.8946
TATA -0.0725-0.025-0.0792-0.0762-0.0883-0.0642-0.1052-0.0688-0.0986-0.0683
M-score -2.76-2.59-2.36-2.92-2.22-0.01-3.33-2.71-2.81-3.12

Marathon Oil Corp Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.19541.10271.12841.26761.12311.01580.91310.69910.78660.7952
GMI 0.91660.99991.05671.17211.20271.16551.1051.05161.03581.0574
AQI 1.32421.41331.36320.96720.8810.83160.52270.87740.650.7986
SGI 0.99840.910.78210.71080.74430.7870.88740.86320.7440.6085
DEPI 0.91620.91140.98741.07711.01731.01540.90960.83560.87510.8483
SGAI 1.20531.11371.23421.36291.25471.2821.10331.08211.35231.5273
LVGI 1.04330.94940.91710.93630.9660.92440.89460.86391.00821.0222
TATA -0.088-0.0989-0.0986-0.0744-0.0778-0.0834-0.0683-0.0784-0.0831-0.0829
M-score -2.69-2.77-2.86-2.79-2.93-3.05-3.11-3.26-3.49-3.57
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