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Sunoco LP (NYSE:SUN)
Beneish M-Score
-1.34 (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 -1.34 signals that the company is a manipulator.

SUN' s Beneish M-Score Range Over the Past 10 Years
Min: -2.4   Max: -0.27
Current: -1.34

-2.4
-0.27

During the past 6 years, the highest Beneish M-Score of Sunoco LP was -0.27. The lowest was -2.40. 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 * 1.3872+0.528 * 0.7517+0.404 * 1.0421+0.892 * 2.2452+0.115 * 1.1651
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2125+4.679 * -0.0286-0.327 * 1.1916
=-1.34

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $173 Mil.
Revenue was 3202.313 + 3674.624 + 4487.317 + 4205.985 = $15,570 Mil.
Gross Profit was 498.743 + 333.216 + 381.147 + 236.773 = $1,450 Mil.
Total Current Assets was $1,197 Mil.
Total Assets was $8,803 Mil.
Property, Plant and Equipment(Net PPE) was $3,162 Mil.
Depreciation, Depletion and Amortization(DDA) was $212 Mil.
Selling, General & Admin. Expense(SGA) was $242 Mil.
Total Current Liabilities was $671 Mil.
Long-Term Debt was $4,193 Mil.
Net Income was 62.009 + 7.755 + 39.542 + 157.035 = $266 Mil.
Non Operating Income was -1.24 + -1.224 + -1.089 + -0.821 = $-4 Mil.
Cash Flow from Operations was 162.343 + 49.811 + 210.769 + 99.774 = $523 Mil.
Accounts Receivable was $56 Mil.
Revenue was 4342.388 + 0 + 1376.025 + 1216.587 = $6,935 Mil.
Gross Profit was 441.092 + 0 + 22.203 + 22.12 = $485 Mil.
Total Current Assets was $212 Mil.
Total Assets was $2,210 Mil.
Property, Plant and Equipment(Net PPE) was $928 Mil.
Depreciation, Depletion and Amortization(DDA) was $73 Mil.
Selling, General & Admin. Expense(SGA) was $89 Mil.
Total Current Liabilities was $169 Mil.
Long-Term Debt was $856 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)
=(173.119 / 15570.239) / (55.586 / 6935)
=0.01111858 / 0.00801528
=1.3872

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)
=(333.216 / 6935) / (498.743 / 15570.239)
=0.06999495 / 0.09311861
=0.7517

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 - (1197.255 + 3161.953) / 8802.642) / (1 - (211.92 + 927.76) / 2210.405)
=0.50478413 / 0.48440218
=1.0421

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
=15570.239 / 6935
=2.2452

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))
=(73.402 / (73.402 + 927.76)) / (212.342 / (212.342 + 3161.953))
=0.07331681 / 0.06292929
=1.1651

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)
=(242.373 / 15570.239) / (89.035 / 6935)
=0.01556643 / 0.0128385
=1.2125

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)
=((4192.912 + 671.248) / 8802.642) / ((856.187 + 168.801) / 2210.405)
=0.55257956 / 0.4637105
=1.1916

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
=(266.341 - -4.374 - 522.697) / 8802.642
=-0.0286

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 -1.34 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 1.9780.5978
GMI 0.76230.1835
AQI 0.35462.4686
SGI 1.05033.7696
DEPI 2.03210.5947
SGAI 1.09233.8634
LVGI 1.02220.5328
TATA -0.034-0.0404
M-score -1.99-0.79

Sunoco LP Quarterly Data

Sep13Dec13Mar14Jun14Sep14Mar15Jun15Sep15Dec15Mar16
DSRI 1.9782.19011.64261.29180.52840.96841.12840.49621.3872
GMI 0.76230.79640.81960.86670.22570.23750.20850.20760.7517
AQI 0.35460.25760.30353.06942.63413.42974.44320.68761.0421
SGI 1.05031.07981.13170.85151.54372.14442.6684.48942.2452
DEPI 2.03211.45411.14181.31810.62751.01790.78810.40691.1651
SGAI 1.09231.0961.16331.16523.23523.04233.34893.37711.2125
LVGI 1.02221.03431.03830.39970.58730.78390.62691.34041.1916
TATA -0.0340.0880.03110.01230.01470.0129-0.0142-0.0206-0.0286
M-score -1.99-1.29-2.03-1.32-2.40-1.13-0.27-1.06-1.34
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