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GuruFocus has detected 5 Warning Signs with Murphy Oil Corp $MUR.
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Murphy Oil Corp (NYSE:MUR)
Beneish M-Score
-2.72 (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.

Murphy Oil Corp has a M-score of -2.72 suggests that the company is not a manipulator.

MUR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.9   Max: -0.6
Current: -2.72

-3.9
-0.6

During the past 13 years, the highest Beneish M-Score of Murphy Oil Corp was -0.60. The lowest was -3.90. And the median was -2.67.


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 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 * 1.1057+0.528 * 1.038+0.404 * 1.6872+0.892 * 0.6179+0.115 * 1.2589
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3996+4.679 * -0.0601-0.327 * 0.9293
=-2.72

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $357 Mil.
Revenue was 505.839 + 500.533 + 437.462 + 430.295 = $1,874 Mil.
Gross Profit was 373.617 + 371.278 + 267.493 + 258.555 = $1,271 Mil.
Total Current Assets was $1,559 Mil.
Total Assets was $10,296 Mil.
Property, Plant and Equipment(Net PPE) was $8,316 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,054 Mil.
Selling, General & Admin. Expense(SGA) was $265 Mil.
Total Current Liabilities was $1,502 Mil.
Long-Term Debt was $2,423 Mil.
Net Income was -63.922 + -16.176 + 2.93 + -198.802 = $-276 Mil.
Non Operating Income was -89.869 + -32.516 + -27.266 + -107.976 = $-258 Mil.
Cash Flow from Operations was 320.445 + 166.972 + 70.066 + 43.312 = $601 Mil.
Accounts Receivable was $523 Mil.
Revenue was 658.094 + 714.949 + 738.29 + 921.747 = $3,033 Mil.
Gross Profit was 457.829 + 516.858 + 491.758 + 668.535 = $2,135 Mil.
Total Current Assets was $1,397 Mil.
Total Assets was $11,494 Mil.
Property, Plant and Equipment(Net PPE) was $9,818 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,620 Mil.
Selling, General & Admin. Expense(SGA) was $307 Mil.
Total Current Liabilities was $1,675 Mil.
Long-Term Debt was $3,041 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)
=(357.099 / 1874.129) / (522.672 / 3033.08)
=0.19054131 / 0.17232384
=1.1057

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)
=(2134.98 / 3033.08) / (1270.943 / 1874.129)
=0.70389835 / 0.67815129
=1.038

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 - (1559.183 + 8316.188) / 10295.86) / (1 - (1397.233 + 9818.365) / 11493.812)
=0.04084059 / 0.02420555
=1.6872

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
=1874.129 / 3033.08
=0.6179

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))
=(1619.824 / (1619.824 + 9818.365)) / (1054.081 / (1054.081 + 8316.188))
=0.14161543 / 0.11249207
=1.2589

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)
=(265.21 / 1874.129) / (306.663 / 3033.08)
=0.14151107 / 0.10110614
=1.3996

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)
=((2422.75 + 1502.432) / 10295.86) / ((3040.594 + 1674.629) / 11493.812)
=0.38123887 / 0.41024014
=0.9293

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
=(-275.97 - -257.627 - 600.795) / 10295.86
=-0.0601

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 -2.72 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 local exchange's currency.

Murphy Oil Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.10770.48922.04190.95154.961.10450.46240.85971.08061.1057
GMI 1.12420.49571.49370.98770.23310.94970.91030.96161.11011.038
AQI 1.41961.00660.48020.89380.68881.50811.29250.22873.56531.6872
SGI 1.28881.48770.69311.05380.21351.07971.16681.0160.55390.6179
DEPI 1.07710.75351.02670.96591.13010.960.85020.82590.88341.2589
SGAI 0.77850.66981.52991.00453.81271.10681.30230.94491.5211.3996
LVGI 1.19690.75971.06010.98130.79971.48391.09040.96291.2110.9293
TATA -0.091-0.126-0.0644-0.1644-0.0877-0.1079-0.1148-0.1177-0.04-0.0601
M-score -2.33-3.26-2.15-3.29-0.88-2.82-3.39-3.48-2.07-2.72

Murphy Oil Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.08740.85970.54750.61830.63871.08062.00371.08611.72751.1057
GMI 6.61560.95571.01621.04441.10271.11691.13851.13041.1011.038
AQI 1.03050.22870.20330.19332.23153.56533.88296.53551.44331.6872
SGI 7.99981.0160.94910.83310.69840.55390.49720.49790.53570.6179
DEPI 0.89650.82590.75660.78680.70540.88341.05411.0281.34831.2589
SGAI 0.14890.94490.97041.03531.24611.5211.64271.64571.48951.3996
LVGI 1.12270.96290.85290.90151.0651.2111.3280.99910.94870.9293
TATA -0.1244-0.1187-0.1234-0.0991-0.038-0.04-0.01260.0045-0.0491-0.0601
M-score 5.41-3.48-3.81-3.74-2.80-2.06-1.04-0.63-2.25-2.72
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