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Sunoco LP (NYSE:SUN)
Beneish M-Score
-1.98 (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 -1.98 signals that the company is a manipulator.

SUN' s 10-Year Beneish M-Score Range
Min: -2.04   Max: -0.98
Current: -1.98

-2.04
-0.98

During the past 5 years, the highest Beneish M-Score of Sunoco LP was -0.98. The lowest was -2.04. And the median was -1.55.


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 * 1.2192+0.528 * 0.2535+0.404 * 4.6969+0.892 * 0.6195+0.115 * 1.1863
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 3.6138+4.679 * -0.0381-0.327 * 0.5639
=-1.98

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

This Year (Mar15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $56 Mil.
Revenue was 1129.728 + 1889.827 + 0 + 0 = $3,020 Mil.
Gross Profit was 87.049 + 115.245 + 0 + 0 = $202 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 $38 Mil.
Selling, General & Admin. Expense(SGA) was $46 Mil.
Total Current Liabilities was $169 Mil.
Long-Term Debt was $856 Mil.
Net Income was 17.072 + 34.233 + 0 + 0 = $51 Mil.
Non Operating Income was -0.381 + -1.987 + 0 + 0 = $-2 Mil.
Cash Flow from Operations was 43.68 + 72.613 + 0 + 21.543 = $138 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)
=(55.586 / 3019.555) / (73.593 / 4873.877)
=0.01840867 / 0.01509948
=1.2192

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)
=(115.245 / 4873.877) / (87.049 / 3019.555)
=0.0169834 / 0.06699464
=0.2535

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 - (211.92 + 927.76) / 2210.405) / (1 - (172.389 + 239.59) / 459.353)
=0.48440218 / 0.10313201
=4.6969

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
=3019.555 / 4873.877
=0.6195

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)) / (37.862 / (37.862 + 927.76))
=0.04651422 / 0.03920996
=1.1863

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)
=(46.012 / 3019.555) / (20.551 / 4873.877)
=0.01523801 / 0.00421656
=3.6138

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)
=((856.187 + 168.801) / 2210.405) / ((235.776 + 141.949) / 459.353)
=0.4637105 / 0.82229788
=0.5639

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
=(51.305 - -2.368 - 137.836) / 2210.405
=-0.0381

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 -1.98 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

Dec10Dec11Dec12Dec13Jun14
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score

Sunoco LP Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Aug14Sep14Dec14Mar15
DSRI 2.22181.65621.75311.17661.2192
GMI 0.7850.80710.9240.39880.2535
AQI 0.25760.30353.59014.61334.6969
SGI 1.06441.11440.57710.70710.6195
DEPI 1.45411.14181.29911.85241.1863
SGAI 1.11171.18131.04731.91183.6138
LVGI 1.03431.03830.39750.55960.5639
TATA 0.0880.0311-0.0103-0.0427-0.0381
M-score -1.28-2.04-0.98-1.55-1.98
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