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Marathon Oil Corp (NYSE:MRO)
Beneish M-Score
-3.26 (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 -3.26 suggests that the company is not a manipulator.

MRO' s 10-Year Beneish M-Score Range
Min: -4.38   Max: 0.55
Current: -3.26

-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 -2.70.


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 * 0.6991+0.528 * 1.0516+0.404 * 0.8774+0.892 * 0.8632+0.115 * 0.8356
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0821+4.679 * -0.0784-0.327 * 0.8639
=-3.26

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
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.
Net Income was -276 + 926 + 431 + 540 = $1,621 Mil.
Non Operating Income was 0 + 20 + 0 + 0 = $20 Mil.
Cash Flow from Operations was 309 + 1155 + 1774 + 1088 = $4,326 Mil.
Accounts Receivable was $2,222 Mil.
Revenue was 2849 + 2550 + 3127 + 2990 = $11,516 Mil.
Gross Profit was 1662 + 1427 + 1809 + 1874 = $6,772 Mil.
Total Current Assets was $4,787 Mil.
Total Assets was $36,151 Mil.
Property, Plant and Equipment(Net PPE) was $28,426 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,423 Mil.
Selling, General & Admin. Expense(SGA) was $683 Mil.
Total Current Liabilities was $4,314 Mil.
Long-Term Debt was $6,392 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)
=(1341 / 9941) / (2222 / 11516)
=0.13489589 / 0.19294894
=0.6991

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)
=(1394 / 11516) / (776 / 9941)
=0.58805141 / 0.55919928
=1.0516

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 - (2968 + 29291) / 34736) / (1 - (4787 + 28426) / 36151)
=0.0713093 / 0.08127023
=0.8774

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
=9941 / 11516
=0.8632

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))
=(2423 / (2423 + 28426)) / (3039 / (3039 + 29291))
=0.07854388 / 0.09399938
=0.8356

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)
=(638 / 9941) / (683 / 11516)
=0.06417865 / 0.05930879
=1.0821

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)
=((5326 + 3561) / 34736) / ((6392 + 4314) / 36151)
=0.25584408 / 0.29614672
=0.8639

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
=(1621 - 20 - 4326) / 34736
=-0.0784

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 -3.26 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 0.58810.73781.11371.47411.07120.24631.06690.86161.10051.0617
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 -2.76-2.59-2.36-2.95-2.22-0.00-3.33-2.71-2.81-3.12

Marathon Oil Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.18831.07431.19541.10271.12841.26761.12311.01580.91310.6991
GMI 0.86210.84640.88130.9521.05671.17211.20271.16551.1051.0516
AQI 1.02990.88011.32421.41331.36320.96720.8810.83160.52270.8774
SGI 1.06141.04430.99840.910.78210.71080.74430.7870.88740.8632
DEPI 1.01960.94540.91620.91140.98741.07711.01731.01540.90960.8356
SGAI 1.19841.19271.20531.11371.23421.36291.25471.2821.10331.0821
LVGI 1.1361.09131.04330.94940.91710.93630.9660.92440.89460.8639
TATA -0.0688-0.0859-0.088-0.0989-0.0986-0.0744-0.0778-0.0834-0.0683-0.0784
M-score -2.71-2.97-2.70-2.80-2.86-2.79-2.93-3.05-3.11-3.26
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