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NGL Energy Partners LP (NYSE:NGL)
Beneish M-Score
-1.28 (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 -1.28 signals that the company is a manipulator.

NGL' s 10-Year Beneish M-Score Range
Min: -1.67   Max: 1.86
Current: -1.28

-1.67
1.86

During the past 5 years, the highest Beneish M-Score of NGL Energy Partners LP was 1.86. The lowest was -1.67. And the median was -1.17.


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 * 0.7395+0.528 * 1.5846+0.404 * 1.113+0.892 * 2.1839+0.115 * 0.9317
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.6555+4.679 * -0.011-0.327 * 0.9083
=-1.28

* 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 $904 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 + -74.277 = $69 Mil.
Accounts Receivable was $560 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 $87 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

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)
=(904.121 / 11961.931) / (559.796 / 5477.288)
=0.0755832 / 0.10220313
=0.7395

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)
=(211.191 / 5477.288) / (114.561 / 11961.931)
=0.07925218 / 0.05001325
=1.5846

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 - (1376.046 + 863.457) / 4265.502) / (1 - (812.533 + 536.451) / 2353.301)
=0.47497317 / 0.42676946
=1.113

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
=11961.931 / 5477.288
=2.1839

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))
=(86.562 / (86.562 + 536.451)) / (151.331 / (151.331 + 863.457))
=0.13894092 / 0.14912573
=0.9317

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)
=0.0307223 / 0.04686589
=0.6555

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)
=0.58052018 / 0.63911756
=0.9083

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
=(25.313 - 3.842 - 68.506) / 4265.502
=-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 -1.28 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 0.7063
GMI 1.4673
AQI 1.1019
SGI 2.1955
DEPI 0.9456
SGAI 0.6945
LVGI 1.0314
TATA -0.0095
M-score -1.40

NGL Energy Partners LP Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 3.04091.84642.01380.41950.62190.81810.70630.7395
GMI 0.64490.59880.8321.01241.03571.34781.46731.5846
AQI 5.15451.59521.12150.96961.06751.09211.10191.113
SGI 2.31792.73893.37113.78772.50292.26642.19552.1839
DEPI 1.20870.49670.48360.47780.70130.82880.94560.9317
SGAI 1.32361.45734.12271.68881.40771.0570.69450.6555
LVGI 0.97891.24631.33191.11210.93581.01511.03140.9083
TATA -0.0391-0.0233-0.0344-0.0671-0.0307-0.0384-0.0093-0.011
M-score 1.86-0.45-0.34-1.06-1.67-1.51-1.40-1.28
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