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Murphy Oil Corp (NYSE:MUR)
Beneish M-Score
6.07 (As of Today)

Warning Sign:

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.

MUR' s 10-Year Beneish M-Score Range
Min: -3.99   Max: 15.58
Current: 6.07

-3.99
15.58

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.


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 * 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
=6.07

* 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

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)
=(970.286 / 5416.127) / (1387.986 / 677.035)
=0.17914757 / 2.0500949
=0.0874

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)
=(928.344 / 677.035) / (1050.086 / 5416.127)
=5.31878116 / 0.65767512
=8.0872

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 - (3287.118 + 14372.837) / 17845.766) / (1 - (3770.806 + 13543.554) / 17491.086)
=0.01041205 / 0.01010378
=1.0305

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
=5416.127 / 677.035
=7.9998

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))
=0.09823293 / 0.1095686
=0.8965

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)
=0.07042837 / 0.47298589
=0.1489

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)
=0.37019862 / 0.32973573
=1.1227

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
=(605.793 - -17.066 - 3313.988) / 17845.766
=-0.1508

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.


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.

Murphy Oil Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.97170.87450.9391.10770.48922.04190.94520.7737.13450.4624
GMI 1.02080.96521.24921.12420.52521.40971.05911.17940.1771.0274
AQI 0.86520.92911.47811.41961.00660.48020.89380.68881.50811.2925
SGI 1.60691.40741.22491.28881.48770.69311.06091.37030.16711.1668
DEPI 0.85640.95921.14131.07710.75350.92771.04971.03871.06370.8502
SGAI 0.68890.85321.17420.77850.66982.05710.75010.83765.01781.3023
LVGI 0.83880.89390.96541.19690.75971.06010.98130.79971.48391.0904
TATA -0.0828-0.075-0.0294-0.0867-0.1166-0.0805-0.1677-0.0877-0.1184-0.1392
M-score -2.31-2.57-2.15-2.31-3.20-2.38-3.22-2.700.80-3.44

Murphy Oil Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.62451.03452.4664.14524.385529.45581.34080.86240.17820.0874
GMI 1.0660.94080.48980.28470.06710.02480.3760.63292.69928.0872
AQI 0.750.50751.50810.93120.66610.44591.29252.2812.65941.0305
SGI 1.15040.88980.48360.27230.06770.02870.40240.69672.83717.9998
DEPI 0.90851.02941.06371.091.10150.92680.85020.83860.82860.8965
SGAI 1.01451.2452.03483.325912.933934.69693.20041.94390.48850.1489
LVGI 0.76610.92761.48391.39121.62081.24061.09041.13271.02821.1227
TATA -0.11-0.0984-0.1184-0.1096-0.1181-0.1349-0.1392-0.1395-0.1519-0.1508
M-score -3.21-3.25-2.54-1.6714.7815.58-3.99-3.43-0.686.07
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