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GuruFocus has detected 5 Warning Signs with Sunoco Logistics Partners LP $SXL.
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Sunoco Logistics Partners LP (NYSE:SXL)
Beneish M-Score
-2.31 (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 Logistics Partners LP has a M-score of -2.31 suggests that the company is not a manipulator.

SXL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.03   Max: -1.07
Current: -2.31

-3.03
-1.07

During the past 13 years, the highest Beneish M-Score of Sunoco Logistics Partners LP was -1.07. The lowest was -3.03. And the median was -2.36.


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 Logistics Partners 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 * 1.5295+0.528 * 0.8552+0.404 * 1.0084+0.892 * 0.8727+0.115 * 0.9877
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2238+4.679 * -0.0138-0.327 * 1.0706
=-2.31

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,555 Mil.
Revenue was 2917 + 2189 + 2268 + 1777 = $9,151 Mil.
Gross Profit was 226 + 334 + 277 + 364 = $1,201 Mil.
Total Current Assets was $2,906 Mil.
Total Assets was $18,849 Mil.
Property, Plant and Equipment(Net PPE) was $12,324 Mil.
Depreciation, Depletion and Amortization(DDA) was $446 Mil.
Selling, General & Admin. Expense(SGA) was $110 Mil.
Total Current Liabilities was $2,138 Mil.
Long-Term Debt was $7,313 Mil.
Net Income was 204 + 154 + 202 + 145 = $705 Mil.
Non Operating Income was 51 + 12 + 8 + 7 = $78 Mil.
Cash Flow from Operations was 360 + 153 + 255 + 120 = $888 Mil.
Accounts Receivable was $1,165 Mil.
Revenue was 2305 + 2407 + 3202 + 2572 = $10,486 Mil.
Gross Profit was 192 + 366 + 365 + 254 = $1,177 Mil.
Total Current Assets was $1,848 Mil.
Total Assets was $15,489 Mil.
Property, Plant and Equipment(Net PPE) was $10,692 Mil.
Depreciation, Depletion and Amortization(DDA) was $382 Mil.
Selling, General & Admin. Expense(SGA) was $103 Mil.
Total Current Liabilities was $1,663 Mil.
Long-Term Debt was $5,591 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)
=(1555 / 9151) / (1165 / 10486)
=0.16992678 / 0.11110051
=1.5295

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)
=(1177 / 10486) / (1201 / 9151)
=0.1122449 / 0.13124249
=0.8552

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 - (2906 + 12324) / 18849) / (1 - (1848 + 10692) / 15489)
=0.19199958 / 0.19039318
=1.0084

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
=9151 / 10486
=0.8727

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))
=(382 / (382 + 10692)) / (446 / (446 + 12324))
=0.03449521 / 0.03492561
=0.9877

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)
=(110 / 9151) / (103 / 10486)
=0.01202054 / 0.00982262
=1.2238

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)
=((7313 + 2138) / 18849) / ((5591 + 1663) / 15489)
=0.50140591 / 0.46833236
=1.0706

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
=(705 - 78 - 888) / 18849
=-0.0138

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 Logistics Partners LP has a M-score of -2.31 suggests that the company will not 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 local exchange's currency.

Sunoco Logistics Partners LP Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.13080.42263.39350.88160.93060.69660.93910.74381.13791.5295
GMI 1.06660.97480.46151.33520.81410.88531.24741.08710.51180.8552
AQI 0.8231.04510.96231.38941.31542.76430.85230.921.07141.0084
SGI 1.2651.36870.53571.44351.39131.20321.26811.08710.57970.8727
DEPI 1.04191.17350.91021.04930.91231.36690.61761.20680.93830.9877
SGAI 0.79780.77072.01530.77942.00651.09570.63680.50721.50571.2238
LVGI 1.06380.92541.02080.9881.03590.51271.18111.09140.97441.0706
TATA -0.0346-0.02220.0239-0.0294-0.0237-0.0187-0.0258-0.022-0.0147-0.0138
M-score -2.30-2.70-1.07-1.95-2.47-1.83-2.39-2.65-3.11-2.31

Sunoco Logistics Partners LP Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 1.06570.74380.56140.78710.74141.13791.31261.30751.49721.5295
GMI 1.27831.04580.87710.69970.54730.53190.49650.57970.75440.8552
AQI 0.8470.920.97750.92830.98581.07141.07281.10421.06811.0084
SGI 1.19051.08710.91930.8040.65160.57970.59880.60130.70830.8727
DEPI 1.18471.20681.15281.08430.99870.93830.91830.92380.95360.9877
SGAI 0.46840.68350.73641.28322.37351.11740.94960.71640.51731.2238
LVGI 1.13841.09140.93910.93010.93050.97441.03641.03681.02371.0706
TATA -0.0083-0.022-0.0305-0.0097-0.022-0.0147-0.0196-0.0273-0.0193-0.0138
M-score -2.14-2.70-3.09-3.10-3.59-3.03-2.89-2.83-2.41-2.31
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