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NGL Energy Partners LP (NYSE:NGL)
Beneish M-Score
-2.18 (As of Today)

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 -2.18 signals that the company is a manipulator.

NGL' s 10-Year Beneish M-Score Range
Min: -2.18   Max: 0.21
Current: -2.18

-2.18
0.21

During the past 7 years, the highest Beneish M-Score of NGL Energy Partners LP was 0.21. The lowest was -2.18. And the median was -1.42.


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 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 * 0.6735+0.528 * 1.1631+0.404 * 1.0273+0.892 * 1.7323+0.115 * 1.1895
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8991+4.679 * -0.0451-0.327 * 0.9383
=-2.18

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $1,024 Mil.
Revenue was 3220.771 + 4552.146 + 5380.526 + 3648.614 = $16,802 Mil.
Gross Profit was 287.75 + 240.478 + 201.061 + 114.561 = $844 Mil.
Total Current Assets was $1,645 Mil.
Total Assets was $6,548 Mil.
Property, Plant and Equipment(Net PPE) was $1,617 Mil.
Depreciation, Depletion and Amortization(DDA) was $210 Mil.
Selling, General & Admin. Expense(SGA) was $526 Mil.
Total Current Liabilities was $1,113 Mil.
Long-Term Debt was $2,745 Mil.
Net Income was 86.778 + -10.918 + -19.224 + -39.975 = $17 Mil.
Non Operating Income was 39.407 + 4.613 + 3.08 + 2.174 = $49 Mil.
Cash Flow from Operations was 180.554 + 143.475 + -70.841 + 9.206 = $262 Mil.
Accounts Receivable was $878 Mil.
Revenue was 3975.935 + 2743.445 + 1593.937 + 1385.957 = $9,699 Mil.
Gross Profit was 211.191 + 167.416 + 105.087 + 82.881 = $567 Mil.
Total Current Assets was $1,286 Mil.
Total Assets was $4,148 Mil.
Property, Plant and Equipment(Net PPE) was $836 Mil.
Depreciation, Depletion and Amortization(DDA) was $133 Mil.
Selling, General & Admin. Expense(SGA) was $338 Mil.
Total Current Liabilities was $975 Mil.
Long-Term Debt was $1,630 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)
=(1024.226 / 16802.057) / (877.904 / 9699.274)
=0.06095837 / 0.09051234
=0.6735

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)
=(240.478 / 9699.274) / (287.75 / 16802.057)
=0.05841417 / 0.05022302
=1.1631

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 - (1645.344 + 1617.389) / 6547.501) / (1 - (1286.299 + 835.848) / 4147.631)
=0.5016827 / 0.4883472
=1.0273

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
=16802.057 / 9699.274
=1.7323

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))
=(132.653 / (132.653 + 835.848)) / (210.475 / (210.475 + 1617.389))
=0.13696733 / 0.11514806
=1.1895

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)
=(526.172 / 16802.057) / (337.822 / 9699.274)
=0.03131593 / 0.03482962
=0.8991

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)
=((2745.299 + 1112.996) / 6547.501) / ((1629.834 + 974.884) / 4147.631)
=0.5892775 / 0.62800138
=0.9383

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
=(16.661 - 49.274 - 262.394) / 6547.501
=-0.0451

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 -2.18 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.

NGL Energy Partners LP Annual Data

Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 2.0680.68280.6735
GMI 0.8321.46731.1631
AQI 1.0271.11551.0273
SGI 3.37112.19551.7323
DEPI 0.53870.9371.1895
SGAI 1.04250.68710.8971
LVGI 1.33121.0280.9383
TATA -0.0351-0.0095-0.0451
M-score 0.21-1.42-2.18

NGL Energy Partners LP Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.84232.0680.4140.6240.81520.68280.75820.89720.63260.6735
GMI 0.59880.8321.01241.03571.34781.46731.58461.74791.53081.1631
AQI 1.59521.0270.96961.06751.09211.11551.1130.84740.95721.0273
SGI 2.73893.37113.78772.50292.26642.19552.18392.65322.39171.7323
DEPI 0.54420.53870.37240.58790.72470.9370.98471.27531.1111.1895
SGAI 1.33331.04250.77520.87880.76840.69160.6530.59780.6780.8991
LVGI 1.24631.33121.11210.93581.01511.0280.90831.1361.04050.9383
TATA -0.0234-0.0348-0.0676-0.0311-0.0386-0.0095-0.0112-0.011-0.0205-0.0451
M-score -0.430.21-0.92-1.59-1.48-1.42-1.26-0.76-1.35-2.18
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