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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 -3.59 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Murphy Oil Corp was -2.07. The lowest was -3.59. 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 * 0.5211||+||0.528 * 0.9014||+||0.404 * 1.2925||+||0.892 * 1.0352||+||0.115 * 0.8502|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3948||+||4.679 * -0.1392||-||0.327 * 1.0904|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $1,000 Mil.|
Revenue was -2947.801 + 2957.857 + 7217.842 + 6639.954 = $13,868 Mil.
Gross Profit was 729.295 + 995.359 + 1150.402 + 932.714 = $3,808 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 $425 Mil.
Total Current Liabilities was $3,224 Mil.
Long-Term Debt was $2,937 Mil.
Net Income was 75.421 + 284.809 + 402.644 + 360.599 = $1,123 Mil.
Non Operating Income was -15.768 + -53.1 + -16.652 + 8.03 = $-77 Mil.
Cash Flow from Operations was 959.971 + 1009.506 + 747.883 + 921.127 = $3,638 Mil.
|Accounts Receivable was $1,853 Mil.
Revenue was -3365.385 + 2646.728 + 7157.605 + 6956.936 = $13,396 Mil.
Gross Profit was 751.213 + 765.869 + 897.201 + 901.145 = $3,315 Mil.
Total Current Assets was $4,109 Mil.
Total Assets was $17,523 Mil.
Property, Plant and Equipment(Net PPE) was $13,012 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,253 Mil.
Selling, General & Admin. Expense(SGA) was $294 Mil.
Total Current Liabilities was $3,409 Mil.
Long-Term Debt was $2,245 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)|
|=||(999.872 / 13867.852)||/||(1853.364 / 13395.884)|
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)|
|=||(995.359 / 13395.884)||/||(729.295 / 13867.852)|
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 - (3508.643 + 13481.055) / 17509.484)||/||(1 - (4108.583 + 13011.606) / 17522.643)|
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))|
|=||(1253.095 / (1253.095 + 13011.606))||/||(1553.394 / (1553.394 + 13481.055))|
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)|
|=||(425.17 / 13867.852)||/||(294.445 / 13395.884)|
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)|
|=||((2936.563 + 3224.031) / 17509.484)||/||((2245.201 + 3409.081) / 17522.643)|
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|
|=||(1123.473 - -77.49||-||3638.487)||/||17509.484|
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 -3.59 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