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Beneish M-Score -0.77 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.
NGL Energy Partners LP has a M-score of -0.77 signals that the company is a manipulator.
During the past 5 years, the highest Beneish M-Score of NGL Energy Partners LP was 1.83. The lowest was -1.67. And the median was -1.07.
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 NGL Energy Partners LP 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 * 0.8972||+||0.528 * 1.7479||+||0.404 * 0.8474||+||0.892 * 2.6532||+||0.115 * 1.214|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.5997||+||4.679 * -0.0109||-||0.327 * 1.136|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $1,433 Mil.|
Revenue was 5380.526 + 3648.614 + 3975.935 + 2743.445 = $15,749 Mil.
Gross Profit was 201.061 + 114.561 + 211.191 + 167.416 = $694 Mil.
Total Current Assets was $2,585 Mil.
Total Assets was $6,552 Mil.
Property, Plant and Equipment(Net PPE) was $1,433 Mil.
Depreciation, Depletion and Amortization(DDA) was $178 Mil.
Selling, General & Admin. Expense(SGA) was $441 Mil.
Total Current Liabilities was $1,760 Mil.
Long-Term Debt was $2,437 Mil.
Net Income was -19.224 + -39.975 + 42.331 + 23.898 = $7 Mil.
Non Operating Income was 3.08 + 2.174 + 1.361 + 0.154 = $7 Mil.
Cash Flow from Operations was -70.841 + 9.206 + 20.06 + 113.517 = $72 Mil.
|Accounts Receivable was $602 Mil.
Revenue was 1593.937 + 1385.957 + 1617.613 + 1338.208 = $5,936 Mil.
Gross Profit was 105.087 + 82.881 + 135.723 + 133.663 = $457 Mil.
Total Current Assets was $1,014 Mil.
Total Assets was $3,026 Mil.
Property, Plant and Equipment(Net PPE) was $632 Mil.
Depreciation, Depletion and Amortization(DDA) was $98 Mil.
Selling, General & Admin. Expense(SGA) was $277 Mil.
Total Current Liabilities was $801 Mil.
Long-Term Debt was $906 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)|
|=||(1433.117 / 15748.52)||/||(602.033 / 5935.715)|
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)|
|=||(114.561 / 5935.715)||/||(201.061 / 15748.52)|
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 - (2585.053 + 1433.313) / 6551.679)||/||(1 - (1013.859 + 631.663) / 3026.493)|
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))|
|=||(98.089 / (98.089 + 631.663))||/||(178.456 / (178.456 + 1433.313))|
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)|
|=||(440.609 / 15748.52)||/||(276.905 / 5935.715)|
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)|
|=||((2437.351 + 1759.98) / 6551.679)||/||((906.066 + 800.658) / 3026.493)|
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|
|=||(7.03 - 6.769||-||71.942)||/||6551.679|
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.
NGL Energy Partners LP has a M-score of -0.77 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
NGL Energy Partners LP Annual Data
NGL Energy Partners LP Quarterly Data