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GuruFocus has detected 2 Warning Signs with Murphy Oil Corp $MUR.
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Murphy Oil Corp (NYSE:MUR)
Beneish M-Score
-2.91 (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.

Murphy Oil Corp has a M-score of -2.91 suggests that the company is not a manipulator.

MUR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.9   Max: 89.9
Current: -2.91

-3.9
89.9

During the past 13 years, the highest Beneish M-Score of Murphy Oil Corp was 89.90. The lowest was -3.90. And the median was -2.65.


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 Murphy Oil Corp 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 * 0.7419+0.528 * 0.927+0.404 * 1.6938+0.892 * 0.8296+0.115 * 1.2034
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0112+4.679 * -0.0712-0.327 * 0.9067
=-2.91

* 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 $321 Mil.
Revenue was 664.619 + 505.839 + 500.533 + 437.462 = $2,108 Mil.
Gross Profit was 531.264 + 373.617 + 371.278 + 267.493 = $1,544 Mil.
Total Current Assets was $1,610 Mil.
Total Assets was $10,272 Mil.
Property, Plant and Equipment(Net PPE) was $8,253 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,004 Mil.
Selling, General & Admin. Expense(SGA) was $246 Mil.
Total Current Liabilities was $1,469 Mil.
Long-Term Debt was $2,422 Mil.
Net Income was 58.464 + -63.922 + -16.176 + 2.93 = $-19 Mil.
Non Operating Income was -0.692 + -89.869 + -32.516 + -27.266 = $-150 Mil.
Cash Flow from Operations was 305.513 + 320.445 + 166.972 + 70.066 = $863 Mil.
Accounts Receivable was $521 Mil.
Revenue was 430.295 + 658.094 + 714.949 + 738.29 = $2,542 Mil.
Gross Profit was 258.555 + 457.829 + 516.858 + 491.758 = $1,725 Mil.
Total Current Assets was $1,699 Mil.
Total Assets was $11,461 Mil.
Property, Plant and Equipment(Net PPE) was $9,492 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,425 Mil.
Selling, General & Admin. Expense(SGA) was $293 Mil.
Total Current Liabilities was $1,378 Mil.
Long-Term Debt was $3,410 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)
=(320.935 / 2108.453) / (521.434 / 2541.628)
=0.15221349 / 0.20515748
=0.7419

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)
=(1725 / 2541.628) / (1543.652 / 2108.453)
=0.67869885 / 0.7321254
=0.927

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 - (1609.856 + 8253.112) / 10271.987) / (1 - (1698.93 + 9492.348) / 11460.697)
=0.03981888 / 0.02350808
=1.6938

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
=2108.453 / 2541.628
=0.8296

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))
=(1424.946 / (1424.946 + 9492.348)) / (1004.086 / (1004.086 + 8253.112))
=0.1305219 / 0.10846543
=1.2034

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)
=(245.958 / 2108.453) / (293.203 / 2541.628)
=0.1166533 / 0.11536031
=1.0112

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)
=((2421.611 + 1468.649) / 10271.987) / ((3409.518 + 1377.755) / 11460.697)
=0.37872517 / 0.4177122
=0.9067

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
=(-18.704 - -150.343 - 862.996) / 10271.987
=-0.0712

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.

Murphy Oil Corp has a M-score of -2.91 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.

Murphy Oil Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.10770.48922.04190.89075.22060.38661.34080.85971.08061.1057
GMI 1.12370.49571.49371.01050.21092.80480.33290.95571.11691.038
AQI 1.41961.00660.48020.89380.68881.50811.29250.22873.56531.6872
SGI 1.28891.48770.69311.12570.20293.08490.40241.0160.55390.6179
DEPI 1.07710.75351.02670.96591.13010.960.85020.82590.88341.2589
SGAI 0.77840.66981.56930.9473.91680.45343.20040.94491.5211.3996
LVGI 1.19690.75971.06010.98130.79971.48391.09040.96291.2110.9293
TATA -0.091-0.123-0.0675-0.1569-0.087-0.1079-0.1148-0.1187-0.04-0.0601
M-score -2.33-3.25-2.17-3.23-0.68-0.60-3.90-3.48-2.06-2.72

Murphy Oil Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.85970.54750.61830.63871.08062.00371.08611.72751.10570.7419
GMI 0.95571.01621.04441.10271.11691.13851.13041.1011.0380.927
AQI 0.22870.20330.19332.23153.56533.88296.53551.44331.68721.6938
SGI 1.0160.94910.83310.69840.55390.49720.49790.53570.61790.8296
DEPI 0.82590.75660.78680.70540.88341.05411.0281.34831.25891.2034
SGAI 0.94490.97041.03531.24611.5211.64271.64571.48951.39961.0112
LVGI 0.96290.85290.90151.0651.2111.3280.99910.94870.92930.9067
TATA -0.1187-0.1234-0.0991-0.038-0.04-0.01260.0045-0.0491-0.0601-0.0712
M-score -3.48-3.81-3.74-2.80-2.06-1.04-0.63-2.25-2.72-2.91
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