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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.
NGL Energy Partners LP has a M-score of -1.26 signals that the company is a manipulator.
During the past 5 years, the highest Beneish M-Score of NGL Energy Partners LP was 1.72. The lowest was -1.59. And the median was -1.09.
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 * 0.7582||+||0.528 * 1.5846||+||0.404 * 1.113||+||0.892 * 2.1839||+||0.115 * 0.9847|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.6555||+||4.679 * -0.0111||-||0.327 * 0.9083|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $903 Mil.|
Revenue was 3648.614 + 3975.935 + 2743.445 + 1593.937 = $11,962 Mil.
Gross Profit was 114.561 + 211.191 + 167.416 + 105.087 = $598 Mil.
Total Current Assets was $1,376 Mil.
Total Assets was $4,266 Mil.
Property, Plant and Equipment(Net PPE) was $863 Mil.
Depreciation, Depletion and Amortization(DDA) was $151 Mil.
Selling, General & Admin. Expense(SGA) was $367 Mil.
Total Current Liabilities was $1,034 Mil.
Long-Term Debt was $1,442 Mil.
Net Income was -39.975 + 42.331 + 23.898 + -0.941 = $25 Mil.
Non Operating Income was 2.174 + 1.361 + 0.154 + 0.153 = $4 Mil.
Cash Flow from Operations was 9.206 + 20.06 + 113.517 + -73.874 = $69 Mil.
|Accounts Receivable was $545 Mil.
Revenue was 1385.957 + 1617.613 + 1338.208 + 1135.51 = $5,477 Mil.
Gross Profit was 82.881 + 135.723 + 133.663 + 81.82 = $434 Mil.
Total Current Assets was $813 Mil.
Total Assets was $2,353 Mil.
Property, Plant and Equipment(Net PPE) was $536 Mil.
Depreciation, Depletion and Amortization(DDA) was $92 Mil.
Selling, General & Admin. Expense(SGA) was $257 Mil.
Total Current Liabilities was $722 Mil.
Long-Term Debt was $782 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)|
|=||(903.011 / 11961.931)||/||(545.317 / 5477.288)|
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)|
|=||(211.191 / 5477.288)||/||(114.561 / 11961.931)|
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 - (1376.046 + 863.457) / 4265.502)||/||(1 - (812.533 + 536.451) / 2353.301)|
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))|
|=||(92.331 / (92.331 + 536.451))||/||(151.331 / (151.331 + 863.457))|
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)|
|=||(367.498 / 11961.931)||/||(256.698 / 5477.288)|
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)|
|=||((1441.875 + 1034.335) / 4265.502)||/||((781.816 + 722.22) / 2353.301)|
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|
|=||(25.313 - 3.842||-||68.909)||/||4265.502|
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 -1.26 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