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Sunoco LP (NYSE:SUN)
Beneish M-Score
-2.16 (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 -2.16 signals that the company is a manipulator.

SUN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.91   Max: 6.56
Current: -2.16

-3.91
6.56

During the past 6 years, the highest Beneish M-Score of Sunoco LP was 6.56. The lowest was -3.91. And the median was -1.72.


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 * 0.7048+0.528 * 0.8953+0.404 * 1.4187+0.892 * 1.6282+0.115 * 1.4131
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0671+4.679 * -0.0315-0.327 * 0.8997
=-2.16

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $233 Mil.
Revenue was 4052.167 + 3202.313 + 3674.624 + 4487.317 = $15,416 Mil.
Gross Profit was 580.567 + 498.743 + 333.216 + 381.147 = $1,794 Mil.
Total Current Assets was $1,030 Mil.
Total Assets was $8,762 Mil.
Property, Plant and Equipment(Net PPE) was $3,228 Mil.
Depreciation, Depletion and Amortization(DDA) was $221 Mil.
Selling, General & Admin. Expense(SGA) was $313 Mil.
Total Current Liabilities was $875 Mil.
Long-Term Debt was $4,189 Mil.
Net Income was 72.137 + 62.009 + 7.755 + 39.542 = $181 Mil.
Non Operating Income was -2.768 + -1.24 + -1.224 + -1.089 = $-6 Mil.
Cash Flow from Operations was 36.775 + 162.343 + 49.811 + 215.047 = $464 Mil.
Accounts Receivable was $203 Mil.
Revenue was 5126.084 + 4342.388 + 0 + 0 = $9,468 Mil.
Gross Profit was 545.21 + 441.092 + 0 + 0 = $986 Mil.
Total Current Assets was $906 Mil.
Total Assets was $3,578 Mil.
Property, Plant and Equipment(Net PPE) was $1,376 Mil.
Depreciation, Depletion and Amortization(DDA) was $137 Mil.
Selling, General & Admin. Expense(SGA) was $180 Mil.
Total Current Liabilities was $605 Mil.
Long-Term Debt was $1,694 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)
=(232.673 / 15416.421) / (202.747 / 9468.472)
=0.01509254 / 0.02141285
=0.7048

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)
=(986.302 / 9468.472) / (1793.673 / 15416.421)
=0.10416697 / 0.11634821
=0.8953

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 - (1030.475 + 3228.409) / 8761.554) / (1 - (905.649 + 1376.489) / 3578.343)
=0.51391226 / 0.3622361
=1.4187

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
=15416.421 / 9468.472
=1.6282

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))
=(136.943 / (136.943 + 1376.489)) / (220.866 / (220.866 + 3228.409))
=0.09048507 / 0.06403259
=1.4131

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)
=(312.714 / 15416.421) / (179.992 / 9468.472)
=0.02028447 / 0.01900961
=1.0671

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)
=((4189.261 + 875.356) / 8761.554) / ((1694.421 + 604.688) / 3578.343)
=0.57805008 / 0.6425066
=0.8997

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
=(181.443 - -6.321 - 463.976) / 8761.554
=-0.0315

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 -2.16 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

Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.31540.9082
GMI 0.21350.6485
AQI 0.35462.4686
SGI 1.57942.4812
DEPI 2.03210.5947
SGAI 3.04471.4002
LVGI 1.02220.5328
TATA -0.2816-0.0404
M-score -3.91-0.99

Sunoco LP Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.47621.12810.80697.46320.69212.08191.40080.11691.080.7048
GMI 0.23630.25140.23853.26590.68830.52340.63280.17720.75980.8953
AQI 0.25760.30353.06942.46164.58643.51240.69411.00281.04211.4187
SGI 1.6021.64781.36320.37980.82261.31392.31066.80032.88371.6282
DEPI 1.45411.14181.318114.42490.67080.51410.53330.04121.1161.4131
SGAI 2.9693.0113.32250.37961.34671.76871.46314.15841.26071.0671
LVGI 1.03431.03830.39970.37850.56570.78141.64261.40771.19160.8997
TATA -0.1247-0.1792-0.0620.0013-0.00540.0062-0.0246-0.0309-0.0359-0.0315
M-score -3.09-3.64-2.366.56-1.62-0.53-1.720.52-1.10-2.16
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