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Beneish M-Score 6.07 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.
Murphy Oil Corp has a M-score of 6.07 signals that the company is a manipulator.
During the past 13 years, the highest Beneish M-Score of Murphy Oil Corp was 15.58. The lowest was -3.99. And the median was -2.63.
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 * 0.0874||+||0.528 * 8.0872||+||0.404 * 1.0305||+||0.892 * 7.9998||+||0.115 * 0.8965|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.1489||+||4.679 * -0.1508||-||0.327 * 1.1227|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $970 Mil.|
Revenue was 1433.037 + 1349.021 + 1286.4 + 1347.669 = $5,416 Mil.
Gross Profit was 1050.086 + 928.344 + 885.679 + 697.943 = $3,562 Mil.
Total Current Assets was $3,287 Mil.
Total Assets was $17,846 Mil.
Property, Plant and Equipment(Net PPE) was $14,373 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,769 Mil.
Selling, General & Admin. Expense(SGA) was $381 Mil.
Total Current Liabilities was $2,620 Mil.
Long-Term Debt was $3,986 Mil.
Net Income was 245.707 + 129.412 + 155.253 + 75.421 = $606 Mil.
Non Operating Income was -0.662 + 0.178 + -0.814 + -15.768 = $-17 Mil.
Cash Flow from Operations was 894.334 + 723.804 + 735.879 + 959.971 = $3,314 Mil.
|Accounts Receivable was $1,388 Mil.
Revenue was 1419.496 + 1331.986 + 1290.938 + -3365.385 = $677 Mil.
Gross Profit was 1013.127 + 991.439 + 845.222 + 751.213 = $3,601 Mil.
Total Current Assets was $3,771 Mil.
Total Assets was $17,491 Mil.
Property, Plant and Equipment(Net PPE) was $13,544 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,475 Mil.
Selling, General & Admin. Expense(SGA) was $320 Mil.
Total Current Liabilities was $3,184 Mil.
Long-Term Debt was $2,583 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)|
|=||(970.286 / 5416.127)||/||(1387.986 / 677.035)|
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)|
|=||(928.344 / 677.035)||/||(1050.086 / 5416.127)|
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 - (3287.118 + 14372.837) / 17845.766)||/||(1 - (3770.806 + 13543.554) / 17491.086)|
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))|
|=||(1475.351 / (1475.351 + 13543.554))||/||(1768.594 / (1768.594 + 14372.837))|
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)|
|=||(381.449 / 5416.127)||/||(320.228 / 677.035)|
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)|
|=||((3986.261 + 2620.217) / 17845.766)||/||((2583.21 + 3184.226) / 17491.086)|
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|
|=||(605.793 - -17.066||-||3313.988)||/||17845.766|
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 6.07 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