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GuruFocus has detected 6 Warning Signs with Enbridge Energy Partners LP $EEP.
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Enbridge Energy Partners LP (NYSE:EEP)
Beneish M-Score
-2.00 (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.

Enbridge Energy Partners LP has a M-score of -2.00 signals that the company is a manipulator.

EEP' s Beneish M-Score Range Over the Past 10 Years
Min: -3.99   Max: 6.84
Current: -2

-3.99
6.84

During the past 13 years, the highest Beneish M-Score of Enbridge Energy Partners LP was 6.84. The lowest was -3.99. And the median was -2.52.


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 Enbridge Energy 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 * 1.2725+0.528 * 0.9715+0.404 * 2.7982+0.892 * 0.9623+0.115 * 0.8927
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9269+4.679 * -0.0844-0.327 * 1.1776
=-2.00

* 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 $185 Mil.
Revenue was 1178.7 + 1250.8 + 1120.6 + 1048.9 = $4,599 Mil.
Gross Profit was 606.1 + 638.3 + 651 + 630 = $2,525 Mil.
Total Current Assets was $429 Mil.
Total Assets was $19,379 Mil.
Property, Plant and Equipment(Net PPE) was $16,696 Mil.
Depreciation, Depletion and Amortization(DDA) was $586 Mil.
Selling, General & Admin. Expense(SGA) was $865 Mil.
Total Current Liabilities was $2,856 Mil.
Long-Term Debt was $8,535 Mil.
Net Income was 65.4 + 80.3 + -406.4 + 83.7 = $-177 Mil.
Non Operating Income was 18.4 + 18.4 + 18.8 + 20 = $76 Mil.
Cash Flow from Operations was 233.7 + 454.6 + 414.6 + 280.2 = $1,383 Mil.
Accounts Receivable was $151 Mil.
Revenue was 1061.6 + 1136.7 + 1267.7 + 1313.1 = $4,779 Mil.
Gross Profit was 623.9 + 667.1 + 672.3 + 586.1 = $2,549 Mil.
Total Current Assets was $472 Mil.
Total Assets was $18,827 Mil.
Property, Plant and Equipment(Net PPE) was $17,573 Mil.
Depreciation, Depletion and Amortization(DDA) was $549 Mil.
Selling, General & Admin. Expense(SGA) was $969 Mil.
Total Current Liabilities was $1,399 Mil.
Long-Term Debt was $7,998 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)
=(185.4 / 4599) / (151.4 / 4779.1)
=0.04031311 / 0.0316796
=1.2725

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)
=(2549.4 / 4779.1) / (2525.4 / 4599)
=0.53344772 / 0.54911937
=0.9715

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 - (428.6 + 16696.4) / 19379.1) / (1 - (472 + 17572.6) / 18827.2)
=0.11631603 / 0.04156752
=2.7982

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
=4599 / 4779.1
=0.9623

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))
=(548.7 / (548.7 + 17572.6)) / (586.2 / (586.2 + 16696.4))
=0.03027928 / 0.03391851
=0.8927

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)
=(864.5 / 4599) / (969.2 / 4779.1)
=0.18797565 / 0.20279969
=0.9269

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)
=((8534.8 + 2855.5) / 19379.1) / ((7997.7 + 1399.1) / 18827.2)
=0.58776207 / 0.49910767
=1.1776

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
=(-177 - 75.6 - 1383.1) / 19379.1
=-0.0844

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.

Enbridge Energy Partners LP has a M-score of -2.00 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.

Enbridge Energy Partners LP Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.96140.18880.76751.11557.37340.82210.32690.83575.44381.0231
GMI 1.07681.01370.51791.87250.60040.71221.26280.78350.64210.8598
AQI 0.73350.99870.8181.24190.96871.12111.16670.88050.6931.2692
SGI 1.11891.35920.5791.34971.17760.73611.06131.11910.64610.8709
DEPI 1.17850.90010.95370.97011.00041.1371.06841.00820.94960.8899
SGAI 1.06130.76311.96540.77771.04051.61951.02960.90911.60881.0248
LVGI 1.03080.90530.99891.08080.99350.96120.85171.01931.02531.0832
TATA -0.0315-0.0171-0.0473-0.0569-0.0377-0.0287-0.085-0.0288-0.0532-0.0914
M-score -2.62-2.92-3.79-1.763.14-3.19-3.18-2.810.61-3.01

Enbridge Energy Partners LP Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.83570.81824.53613.29725.44386.19511.20321.91411.02311.2725
GMI 0.78350.76330.6680.60310.64210.65220.67310.75110.85980.9715
AQI 0.88050.91970.73950.75570.6930.67490.85340.96251.26922.7982
SGI 1.11910.97470.87710.77420.64610.65340.66830.71830.87090.9623
DEPI 1.00820.97340.97440.95590.94960.95820.9450.89510.88990.8927
SGAI 0.90911.01941.1041.35521.60881.58721.59051.32921.02480.9269
LVGI 1.01931.040.97461.00821.02531.05241.06541.11311.08321.1776
TATA -0.0288-0.0356-0.0506-0.0614-0.0532-0.0497-0.0404-0.0694-0.0914-0.0844
M-score -2.81-3.010.13-1.230.611.32-3.14-2.47-3.01-2.00
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