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Sunoco LP (NYSE:SUN)
Beneish M-Score
-0.50 (As of Today)

Warning Sign:

Beneish M-Score -0.5 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.

Sunoco LP has a M-score of -0.50 signals that the company is a manipulator.

SUN' s Beneish M-Score Range Over the Past 10 Years
Min: -2.35   Max: -0.5
Current: -0.5

-2.35
-0.5

During the past 5 years, the highest Beneish M-Score of Sunoco LP was -0.50. The lowest was -2.35. 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 * 1.4938+0.528 * 0.2366+0.404 * 4.4432+0.892 * 2.0154+0.115 * 0.7881
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 3.1761+4.679 * -0.0194-0.327 * 0.6269
=-0.50

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

This Year (Sep15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $223 Mil.
Revenue was 4487.317 + 4205.985 + 1129.728 + 0 = $9,823 Mil.
Gross Profit was 381.147 + 236.773 + 87.049 + 0 = $705 Mil.
Total Current Assets was $1,050 Mil.
Total Assets was $6,180 Mil.
Property, Plant and Equipment(Net PPE) was $2,298 Mil.
Depreciation, Depletion and Amortization(DDA) was $144 Mil.
Selling, General & Admin. Expense(SGA) was $132 Mil.
Total Current Liabilities was $742 Mil.
Long-Term Debt was $2,443 Mil.
Net Income was 39.542 + 157.035 + 17.072 + 0 = $214 Mil.
Non Operating Income was -1.089 + -0.821 + -0.381 + 0 = $-2 Mil.
Cash Flow from Operations was 210.769 + 81.49 + 43.68 + 0 = $336 Mil.
Accounts Receivable was $74 Mil.
Revenue was 1376.025 + 1216.587 + 1114.468 + 1166.797 = $4,874 Mil.
Gross Profit was 22.203 + 22.12 + 20.049 + 18.403 = $83 Mil.
Total Current Assets was $172 Mil.
Total Assets was $459 Mil.
Property, Plant and Equipment(Net PPE) was $240 Mil.
Depreciation, Depletion and Amortization(DDA) was $12 Mil.
Selling, General & Admin. Expense(SGA) was $21 Mil.
Total Current Liabilities was $142 Mil.
Long-Term Debt was $236 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)
=(223.156 / 9823.03) / (74.121 / 4873.877)
=0.02271763 / 0.01520781
=1.4938

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)
=(236.773 / 4873.877) / (381.147 / 9823.03)
=0.0169834 / 0.07176696
=0.2366

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 - (1049.869 + 2298.004) / 6179.593) / (1 - (172.389 + 239.59) / 459.353)
=0.4582373 / 0.10313201
=4.4432

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
=9823.03 / 4873.877
=2.0154

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))
=(11.688 / (11.688 + 239.59)) / (144.128 / (144.128 + 2298.004))
=0.04651422 / 0.05901728
=0.7881

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)
=(131.554 / 9823.03) / (20.551 / 4873.877)
=0.01339241 / 0.00421656
=3.1761

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)
=((2443.447 + 742.146) / 6179.593) / ((235.776 + 141.949) / 459.353)
=0.51550207 / 0.82229788
=0.6269

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
=(213.649 - -2.291 - 335.939) / 6179.593
=-0.0194

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 -0.50 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 1.9984
GMI 0.7545
AQI 0.3546
SGI 1.0396
DEPI 2.0321
SGAI 1.1035
LVGI 1.0222
TATA -0.034
M-score -1.98

Sunoco LP Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Mar15Jun15Sep15
DSRI 1.99842.22181.66811.31470.98441.42911.4938
GMI 0.75450.7850.80710.85170.44760.32560.2366
AQI 0.35460.25760.30353.06942.63413.42974.4432
SGI 1.03961.06441.11440.83670.82861.45322.0154
DEPI 2.03211.45411.14181.31811.8081.01790.7881
SGAI 1.10351.11171.18131.18582.50282.58823.1761
LVGI 1.02221.03431.03830.39970.58730.78390.6269
TATA -0.0340.0880.03110.0123-0.00820.0039-0.0194
M-score -1.98-1.28-2.03-1.32-2.35-1.24-0.50
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