Switch to:
Sunoco LP (NYSE:SUN)
Beneish M-Score
-1.88 (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 -1.88 signals that the company is a manipulator.

SUN' s 10-Year Beneish M-Score Range
Min: -2.04   Max: -1.04
Current: -1.88

-2.04
-1.04

During the past 5 years, the highest Beneish M-Score of Sunoco LP was -1.04. 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 * 0.7264+0.528 * 0.47+0.404 * 4.5864+0.892 * 0.7838+0.115 * 1.9074
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.5076+4.679 * -0.024-0.327 * 0.5657
=-1.88

* 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 (Mar14) TTM:
Accounts Receivable was $56 Mil.
Revenue was 1129.728 + 1114.468 + 0 + 1376.025 = $3,620 Mil.
Gross Profit was 87.049 + 20.049 + 0 + 22.203 = $129 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 $23 Mil.
Selling, General & Admin. Expense(SGA) was $37 Mil.
Total Current Liabilities was $169 Mil.
Long-Term Debt was $856 Mil.
Net Income was 17.072 + 9.523 + 0 + 9.595 = $36 Mil.
Non Operating Income was -0.381 + 0 + 0 + -0.13 = $-1 Mil.
Cash Flow from Operations was 43.68 + 0 + 0 + 46.035 = $90 Mil.
Accounts Receivable was $98 Mil.
Revenue was 1216.587 + 1114.468 + 1166.797 + 1120.897 = $4,619 Mil.
Gross Profit was 22.12 + 20.049 + 18.403 + 16.956 = $78 Mil.
Total Current Assets was $200 Mil.
Total Assets was $454 Mil.
Property, Plant and Equipment(Net PPE) was $206 Mil.
Depreciation, Depletion and Amortization(DDA) was $10 Mil.
Selling, General & Admin. Expense(SGA) was $19 Mil.
Total Current Liabilities was $139 Mil.
Long-Term Debt was $234 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 / 3620.221) / (97.628 / 4618.749)
=0.01535431 / 0.02113733
=0.7264

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)
=(20.049 / 4618.749) / (87.049 / 3620.221)
=0.0167855 / 0.03571633
=0.47

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 - (200.052 + 206.144) / 454.163)
=0.48440218 / 0.10561627
=4.5864

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
=3620.221 / 4618.749
=0.7838

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))
=(10.192 / (10.192 + 206.144)) / (23.496 / (23.496 + 927.76))
=0.0471119 / 0.02469998
=1.9074

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)
=(37.037 / 3620.221) / (18.844 / 4618.749)
=0.01023059 / 0.00407989
=2.5076

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) / ((233.543 + 138.719) / 454.163)
=0.4637105 / 0.81966607
=0.5657

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
=(36.19 - -0.511 - 89.715) / 2210.405
=-0.024

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 -1.88 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 2.22181.65621.31471.44440.7264
GMI 0.7850.80710.85170.90970.47
AQI 0.25760.30353.06942.64954.5864
SGI 1.06441.11440.83670.82520.7838
DEPI 1.45411.14181.31814.54671.9074
SGAI 1.11171.18131.18581.0852.5076
LVGI 1.03431.03830.39970.5810.5657
TATA 0.0880.03110.01230.008-0.024
M-score -1.28-2.04-1.32-1.04-1.88
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK