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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 -3.42 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Murphy Oil Corp was -1.47. The lowest was -3.65. And the median was -2.66.
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 * 1.767||+||0.528 * 0.3077||+||0.404 * 2.281||+||0.892 * 0.34||+||0.115 * 0.8386|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 3.8743||+||4.679 * -0.1395||-||0.327 * 1.1327|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $1,007 Mil.|
Revenue was 1286.4 + -2947.801 + 2957.857 + 1331.986 = $2,628 Mil.
Gross Profit was 885.679 + 729.295 + 995.359 + 991.439 = $3,602 Mil.
Total Current Assets was $3,374 Mil.
Total Assets was $17,551 Mil.
Property, Plant and Equipment(Net PPE) was $13,655 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,587 Mil.
Selling, General & Admin. Expense(SGA) was $379 Mil.
Total Current Liabilities was $3,057 Mil.
Long-Term Debt was $3,416 Mil.
Net Income was 155.253 + 75.421 + 284.809 + 402.644 = $918 Mil.
Non Operating Income was -0.814 + -15.768 + -53.1 + -16.386 = $-86 Mil.
Cash Flow from Operations was 735.879 + 959.971 + 1009.506 + 747.883 = $3,453 Mil.
|Accounts Receivable was $1,676 Mil.
Revenue was 1290.938 + -3365.385 + 2646.728 + 7157.605 = $7,730 Mil.
Gross Profit was 845.222 + 751.213 + 765.869 + 897.201 = $3,260 Mil.
Total Current Assets was $4,099 Mil.
Total Assets was $17,752 Mil.
Property, Plant and Equipment(Net PPE) was $13,421 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,284 Mil.
Selling, General & Admin. Expense(SGA) was $288 Mil.
Total Current Liabilities was $3,272 Mil.
Long-Term Debt was $2,507 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)|
|=||(1007.125 / 2628.442)||/||(1676.172 / 7729.886)|
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)|
|=||(729.295 / 7729.886)||/||(885.679 / 2628.442)|
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 - (3373.559 + 13654.991) / 17551.138)||/||(1 - (4098.803 + 13421.164) / 17751.685)|
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))|
|=||(1283.649 / (1283.649 + 13421.164))||/||(1586.501 / (1586.501 + 13654.991))|
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)|
|=||(379.091 / 2628.442)||/||(287.753 / 7729.886)|
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)|
|=||((3415.621 + 3056.844) / 17551.138)||/||((2507.311 + 3272.083) / 17751.685)|
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|
|=||(918.127 - -86.068||-||3453.239)||/||17551.138|
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 -3.42 suggests that the company will not 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