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NGL Energy Partners LP (NYSE:NGL)
Beneish M-Score
-0.76 (As of Today)

Warning Sign:

Beneish M-Score -0.76 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 -0.76 signals that the company is a manipulator.

NGL' s 10-Year Beneish M-Score Range
Min: -1.67   Max: 1.83
Current: -0.76

-1.67
1.83

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.


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 * 0.8972+0.528 * 1.7479+0.404 * 0.8474+0.892 * 2.6532+0.115 * 1.2753
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.5997+4.679 * -0.011-0.327 * 1.136
=-0.76

* 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 $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 + 113.92 = $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 $104 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

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)
=(1433.117 / 15748.52) / (602.033 / 5935.715)
=0.09100011 / 0.10142552
=0.8972

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)
=(114.561 / 5935.715) / (201.061 / 15748.52)
=0.07705121 / 0.04408217
=1.7479

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 - (2585.053 + 1433.313) / 6551.679) / (1 - (1013.859 + 631.663) / 3026.493)
=0.38666623 / 0.45629413
=0.8474

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
=15748.52 / 5935.715
=2.6532

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))
=(103.858 / (103.858 + 631.663)) / (178.456 / (178.456 + 1433.313))
=0.14120331 / 0.11072058
=1.2753

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)
=0.0279778 / 0.04665066
=0.5997

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)
=0.64064967 / 0.56392795
=1.136

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
=(7.03 - 6.769 - 72.345) / 6551.679
=-0.011

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 -0.76 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

Mar09Mar10Mar12Mar13Mar14
DSRI 0.7065
GMI 1.4673
AQI 1.112
SGI 2.1955
DEPI 0.9307
SGAI 0.6945
LVGI 1.0313
TATA -0.0095
M-score -1.40

NGL Energy Partners LP Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 3.01561.84232.01330.4140.6240.81520.70650.75820.8972
GMI 0.64490.59880.8321.01241.03571.34781.46731.58461.7479
AQI 5.15451.59521.11130.96961.06751.09211.1121.1130.8474
SGI 2.31792.73893.37113.78772.50292.26642.19552.18392.6532
DEPI 1.20870.49670.46160.45210.66760.7940.99060.98471.2753
SGAI 1.32361.45734.12271.68881.40771.0570.69450.65550.5997
LVGI 0.97891.24631.3321.11210.93581.01511.03130.90831.136
TATA -0.0391-0.0233-0.0347-0.0675-0.031-0.0387-0.0095-0.0112-0.011
M-score 1.83-0.45-0.35-1.07-1.67-1.52-1.39-1.26-0.76
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