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GuruFocus has detected 4 Warning Signs with Enterprise Products Partners LP $EPD.
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Enterprise Products Partners LP (NYSE:EPD)
Beneish M-Score
-2.34 (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.

Enterprise Products Partners LP has a M-score of -2.34 suggests that the company is not a manipulator.

EPD' s Beneish M-Score Range Over the Past 10 Years
Min: -3.29   Max: -1.18
Current: -2.34

-3.29
-1.18

During the past 13 years, the highest Beneish M-Score of Enterprise Products Partners LP was -1.18. The lowest was -3.29. And the median was -2.45.


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 Enterprise Products 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 * 1.2477+0.528 * 0.9887+0.404 * 0.9544+0.892 * 1.0316+0.115 * 0.9999
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8627+4.679 * -0.0268-0.327 * 0.9734
=-2.34

* 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 $3,153 Mil.
Revenue was 7320.4 + 6478.8 + 5920.4 + 5617.8 = $25,337 Mil.
Gross Profit was 987.2 + 870.1 + 854.7 + 795.6 = $3,508 Mil.
Total Current Assets was $5,642 Mil.
Total Assets was $51,530 Mil.
Property, Plant and Equipment(Net PPE) was $33,556 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,572 Mil.
Selling, General & Admin. Expense(SGA) was $167 Mil.
Total Current Liabilities was $7,048 Mil.
Long-Term Debt was $21,123 Mil.
Net Income was 760.7 + 658.8 + 634.6 + 558.5 = $2,613 Mil.
Non Operating Income was -21.3 + 3.8 + -6.2 + -22.9 = $-47 Mil.
Cash Flow from Operations was 875.6 + 1407.8 + 813.8 + 945.5 = $4,043 Mil.
Accounts Receivable was $2,449 Mil.
Revenue was 5005.3 + 6155 + 6307.9 + 7092.5 = $24,561 Mil.
Gross Profit was 858.4 + 912.8 + 855.3 + 735 = $3,362 Mil.
Total Current Assets was $4,593 Mil.
Total Assets was $49,737 Mil.
Property, Plant and Equipment(Net PPE) was $32,673 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,531 Mil.
Selling, General & Admin. Expense(SGA) was $187 Mil.
Total Current Liabilities was $6,013 Mil.
Long-Term Debt was $21,920 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)
=(3152.8 / 25337.4) / (2449.4 / 24560.7)
=0.12443266 / 0.09972843
=1.2477

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)
=(3361.5 / 24560.7) / (3507.6 / 25337.4)
=0.13686499 / 0.13843567
=0.9887

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 - (5641.5 + 33556.1) / 51529.5) / (1 - (4592.6 + 32673.3) / 49737.4)
=0.23931728 / 0.25074692
=0.9544

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
=25337.4 / 24560.7
=1.0316

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))
=(1530.7 / (1530.7 + 32673.3)) / (1572.2 / (1572.2 + 33556.1))
=0.04475208 / 0.04475594
=0.9999

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)
=(166.6 / 25337.4) / (187.2 / 24560.7)
=0.00657526 / 0.00762193
=0.8627

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)
=((21123 + 7048) / 51529.5) / ((21919.8 + 6013.4) / 49737.4)
=0.54669655 / 0.56161359
=0.9734

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
=(2612.6 - -46.6 - 4042.7) / 51529.5
=-0.0268

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.

Enterprise Products Partners LP has a M-score of -2.34 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.

Enterprise Products Partners LP Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.25440.49052.08780.93620.89331.00571.12280.69491.19261.521
GMI 1.1611.06410.68430.80631.39930.8951.0330.93940.6260.8469
AQI 0.93581.2091.14861.00160.82650.84931.05291.63061.01960.9278
SGI 1.21152.09260.71921.32251.31340.9611.12081.00470.56370.8518
DEPI 1.00811.02410.9350.93161.11691.01950.98480.99280.96371.0145
SGAI 1.14190.74761.85250.84710.67590.97480.98651.13381.5930.9759
LVGI 1.15131.0161.00760.99611.02930.99160.97730.93960.99630.9863
TATA -0.0636-0.0255-0.0795-0.0652-0.0376-0.0151-0.0316-0.0292-0.0299-0.0294
M-score -2.37-1.93-2.36-2.64-2.27-2.69-2.36-2.67-3.13-2.37

Enterprise Products Partners LP Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.69490.69330.84690.86231.19261.42031.46681.43791.5211.2477
GMI 0.93940.86260.78490.68360.6260.61140.62040.71560.84690.9887
AQI 1.63061.6131.47681.70111.01960.99641.03930.92760.92780.9544
SGI 1.00470.86320.73250.61070.56370.57770.62250.73070.85181.0316
DEPI 0.99280.9860.92730.96470.96370.99011.08911.0531.01450.9999
SGAI 1.13381.27081.46071.69051.5931.53861.37141.12760.97590.8627
LVGI 0.93960.91580.92490.91870.99631.00190.99140.97990.98630.9734
TATA -0.0292-0.0234-0.0341-0.0318-0.0299-0.0275-0.0262-0.0289-0.0291-0.0268
M-score -2.67-2.84-3.00-3.08-3.13-2.90-2.75-2.64-2.37-2.34
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