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GuruFocus has detected 7 Warning Signs with Brookfield Infrastructure Partners LP $BIP.
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Brookfield Infrastructure Partners LP (NYSE:BIP)
Beneish M-Score
-1.99 (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.

Brookfield Infrastructure Partners LP has a M-score of -2.01 signals that the company is a manipulator.

BIP' s Beneish M-Score Range Over the Past 10 Years
Min: -2.84   Max: 15.51
Current: -1.99

-2.84
15.51

During the past 10 years, the highest Beneish M-Score of Brookfield Infrastructure Partners LP was 15.51. The lowest was -2.84. And the median was -2.34.


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 Brookfield Infrastructure 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 * 1.2963+0.528 * 1.1815+0.404 * 1.1468+0.892 * 1.2572+0.115 * 0.9266
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0451+4.679 * -0.0397-0.327 * 0.9591
=-2.01

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $559 Mil.
Revenue was 656 + 677 + 522 + 462 = $2,317 Mil.
Gross Profit was 313 + 281 + 255 + 264 = $1,113 Mil.
Total Current Assets was $2,255 Mil.
Total Assets was $22,303 Mil.
Property, Plant and Equipment(Net PPE) was $8,905 Mil.
Depreciation, Depletion and Amortization(DDA) was $467 Mil.
Selling, General & Admin. Expense(SGA) was $180 Mil.
Total Current Liabilities was $1,497 Mil.
Long-Term Debt was $8,593 Mil.
Net Income was 20 + 121 + 62 + 116 = $319 Mil.
Non Operating Income was 10 + 179 + 102 + 145 = $436 Mil.
Cash Flow from Operations was 178 + 89 + 343 + 159 = $769 Mil.
Accounts Receivable was $343 Mil.
Revenue was 454 + 455 + 468 + 466 = $1,843 Mil.
Gross Profit was 252 + 256 + 269 + 269 = $1,046 Mil.
Total Current Assets was $2,735 Mil.
Total Assets was $18,756 Mil.
Property, Plant and Equipment(Net PPE) was $7,850 Mil.
Depreciation, Depletion and Amortization(DDA) was $380 Mil.
Selling, General & Admin. Expense(SGA) was $137 Mil.
Total Current Liabilities was $1,348 Mil.
Long-Term Debt was $7,499 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)
=(559 / 2317) / (343 / 1843)
=0.24126025 / 0.1861096
=1.2963

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)
=(1046 / 1843) / (1113 / 2317)
=0.5675529 / 0.48036254
=1.1815

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 - (2255 + 8905) / 22303) / (1 - (2735 + 7850) / 18756)
=0.49961889 / 0.43564726
=1.1468

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
=2317 / 1843
=1.2572

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))
=(380 / (380 + 7850)) / (467 / (467 + 8905))
=0.04617254 / 0.04982928
=0.9266

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)
=(180 / 2317) / (137 / 1843)
=0.07768666 / 0.07433532
=1.0451

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)
=((8593 + 1497) / 22303) / ((7499 + 1348) / 18756)
=0.45240551 / 0.47168906
=0.9591

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
=(319 - 436 - 769) / 22303
=-0.0397

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.

Brookfield Infrastructure Partners LP has a M-score of -2.01 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 local exchange's currency.

Brookfield Infrastructure Partners LP Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.11421.58510.54431.29960.90820.82011.04071.1548
GMI 2.11650.73750.70161.02360.88370.98040.98331.1456
AQI 0.96710.77761.09440.84920.76010.97931.16071.0712
SGI 8.82072.18471.75871.47441.11071.05370.96411.1402
DEPI 4.22011.04710.31711.06460.69860.90560.95860.9538
SGAI 0.14090.92071.00731.03921.04250.99221.20861.0865
LVGI 1.66131.48530.77411.09480.98251.07780.99760.949
TATA 0.011-0.0161-0.0185-0.0256-0.0348-0.038-0.0338-0.0416
M-score 4.61-1.33-2.43-1.98-2.82-2.83-2.62-2.31

Brookfield Infrastructure Partners LP Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.82010.83140.97881.16121.04071.18891.29941.39921.15481.2963
GMI 0.98040.99480.98560.97680.98330.98981.00021.05061.14561.1815
AQI 0.97931.00570.9570.96611.16071.01141.1921.2121.07121.1468
SGI 1.05371.03641.01020.96680.96410.96490.9741.0151.14021.2572
DEPI 0.90560.8480.8650.86640.95861.04020.97331.08960.95380.9266
SGAI 0.99221.081.13141.20051.20861.16381.13891.18981.08651.0451
LVGI 1.07781.11481.02281.00450.99760.98051.06591.01970.9490.9591
TATA -0.038-0.0469-0.042-0.0437-0.0338-0.0279-0.0298-0.0361-0.0416-0.0397
M-score -2.83-2.89-2.76-2.64-2.62-2.49-2.34-2.18-2.31-2.01
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