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Sunoco LP (NYSE:SUN)
Beneish M-Score
-1.32 (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.

Sunoco LP has a M-score of -1.32 signals that the company is a manipulator.

SUN' s 10-Year Beneish M-Score Range
Min: -2.04   Max: -1.28
Current: -1.32

-2.04
-1.28

During the past 5 years, the highest Beneish M-Score of Sunoco LP was -1.28. The lowest was -2.04. And the median was -1.32.


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 Sunoco 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 * 1.3147+0.528 * 0.8517+0.404 * 3.0694+0.892 * 0.8367+0.115 * 1.3181
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1858+4.679 * 0.0123-0.327 * 0.3997
=-1.32

* 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 $69 Mil.
Revenue was 0 + 1376.025 + 1216.587 + 1114.468 = $3,707 Mil.
Gross Profit was 0 + 22.203 + 22.12 + 20.049 = $64 Mil.
Total Current Assets was $157 Mil.
Total Assets was $1,300 Mil.
Property, Plant and Equipment(Net PPE) was $285 Mil.
Depreciation, Depletion and Amortization(DDA) was $9 Mil.
Selling, General & Admin. Expense(SGA) was $16 Mil.
Total Current Liabilities was $135 Mil.
Long-Term Debt was $273 Mil.
Net Income was 0 + 9.595 + 10.132 + 9.523 = $29 Mil.
Non Operating Income was 0 + -0.13 + -0.096 + -0.095 = $-0 Mil.
Cash Flow from Operations was 0 + 46.035 + -34.216 + 1.818 = $14 Mil.
Accounts Receivable was $63 Mil.
Revenue was 1166.797 + 1120.897 + 1090.417 + 1052.631 = $4,431 Mil.
Gross Profit was 18.403 + 16.956 + 15.556 + 14.611 = $66 Mil.
Total Current Assets was $133 Mil.
Total Assets was $385 Mil.
Property, Plant and Equipment(Net PPE) was $169 Mil.
Depreciation, Depletion and Amortization(DDA) was $7 Mil.
Selling, General & Admin. Expense(SGA) was $16 Mil.
Total Current Liabilities was $118 Mil.
Long-Term Debt was $184 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)
=(68.945 / 3707.08) / (62.68 / 4430.742)
=0.0185982 / 0.01414661
=1.3147

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)
=(22.203 / 4430.742) / (0 / 3707.08)
=0.01478895 / 0.01736461
=0.8517

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 - (156.856 + 284.804) / 1299.813) / (1 - (133.192 + 169.3) / 385.386)
=0.66021266 / 0.21509344
=3.0694

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
=3707.08 / 4430.742
=0.8367

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))
=(7.328 / (7.328 + 169.3)) / (9.256 / (9.256 + 284.804))
=0.04148833 / 0.03147657
=1.3181

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)
=(15.961 / 3707.08) / (16.088 / 4430.742)
=0.00430555 / 0.00363099
=1.1858

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)
=((273.03 + 134.888) / 1299.813) / ((184.222 + 118.354) / 385.386)
=0.31382822 / 0.78512452
=0.3997

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
=(29.25 - -0.321 - 13.637) / 1299.813
=0.0123

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.

Sunoco LP has a M-score of -1.32 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.

Sunoco LP Annual Data

Dec10Dec11Dec12Dec13Dec14
DSRI 0.8039
GMI 1
AQI 2.6401
SGI 1
DEPI 4.8415
SGAI 1
LVGI 0.5829
TATA 0.0168
M-score -1.34

Sunoco LP Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 2.22181.65621.31471.4444
GMI 0.7850.80710.85170.9097
AQI 0.25760.30353.06942.6495
SGI 1.06441.11440.83670.8252
DEPI 1.45411.14181.31814.5467
SGAI 1.11171.18131.18581.085
LVGI 1.03431.03830.39970.581
TATA 0.0880.03110.01230.008
M-score -1.28-2.04-1.32-1.04
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