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Beneish M-Score 62.07 higher than -2.22, which implies that it might have manipulated its financial results.
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.
During the past 13 years, the highest Beneish M-Score of Murphy Oil Corp was -2.07. The lowest was -3.99. And the median was -2.65.
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 Murphy 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||+||0.528 * 0.8982||+||0.404 * 27.1263||+||0.892 * 266.6153||+||0.115 * 0.1033|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.8234||+||4.679 * -38.8773||-||0.327 * 0.9551|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $0 Mil.|
Revenue was 1407.626 + 1433037 + 1349.021 + 1286.4 = $1,437,080 Mil.
Gross Profit was 1131.376 + 1050086 + 928.344 + 885.679 = $1,053,031 Mil.
Total Current Assets was $3,256 Mil.
Total Assets was $16,721 Mil.
Property, Plant and Equipment(Net PPE) was $0 Mil.
Depreciation, Depletion and Amortization(DDA) was $500,558 Mil.
Selling, General & Admin. Expense(SGA) was $83,241 Mil.
Total Current Liabilities was $3,083 Mil.
Long-Term Debt was $2,536 Mil.
Net Income was 375.238 + 245708 + 129.412 + 155.253 = $246,368 Mil.
Non Operating Income was -65.1 + 0 + 0 + 0 = $-65 Mil.
Cash Flow from Operations was 714.596 + 894334 + 723.804 + 735.879 = $896,508 Mil.
|Accounts Receivable was $1,000 Mil.
Revenue was 1347.669 + 1419.496 + 1331.986 + 1290.938 = $5,390 Mil.
Gross Profit was 697.943 + 1013.127 + 991.439 + 845.222 = $3,548 Mil.
Total Current Assets was $3,509 Mil.
Total Assets was $17,509 Mil.
Property, Plant and Equipment(Net PPE) was $13,481 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,553 Mil.
Selling, General & Admin. Expense(SGA) was $379 Mil.
Total Current Liabilities was $3,224 Mil.
Long-Term Debt was $2,937 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(0 / 1437080.047)||/||(999.872 / 5390.089)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1050086 / 5390.089)||/||(1131.376 / 1437080.047)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (3256.1 + 0) / 16721.2)||/||(1 - (3508.643 + 13481.055) / 17509.484)|
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.
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))|
|=||(1553.394 / (1553.394 + 13481.055))||/||(500558.096 / (500558.096 + 0))|
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)|
|=||(83241.044 / 1437080.047)||/||(379.167 / 5390.089)|
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)|
|=||((2536.2 + 3082.9) / 16721.2)||/||((2936.563 + 3224.031) / 17509.484)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(246367.903 - -65.1||-||896508.279)||/||16721.2|
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.
Murphy Oil Corp has a M-score of 62.07 signals that the company is likely to be a manipulator.
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
Murphy Oil Corp Annual Data
Murphy Oil Corp Quarterly Data