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NGL Energy Partners LP  (NYSE:NGL) Beneish M-Score: -2.06 (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.

NGL Energy Partners LP has a M-score of -2.06 signals that the company is a manipulator.

NYSE:NGL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.83   Max: 1.85
Current: -2.06

-3.83
1.85

During the past 9 years, the highest Beneish M-Score of NGL Energy Partners LP was 1.85. The lowest was -3.83. And the median was -1.59.


Historical Data

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

* Premium members only.

NGL Energy Partners LP Annual Data

Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.21 -1.37 -2.15 -3.83 -1.67

NGL Energy Partners LP Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.88 -2.14 -1.67 -2.15 -2.06

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 NGL 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 * 1.0242+0.528 * 1.4884+0.404 * 0.9229+0.892 * 1.388+0.115 * 0.8916
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.6324+4.679 * -0.0482-0.327 * 1.0089
=-2.06

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

This Year (Sep17) TTM:Last Year (Sep16) TTM:
Accounts Receivable was $842 Mil.
Revenue was 3923.329 + 3781.566 + 3848.079 + 3406.641 = $14,960 Mil.
Gross Profit was 152.608 + 139.458 + 249.362 + 178.619 = $720 Mil.
Total Current Assets was $1,546 Mil.
Total Assets was $6,210 Mil.
Property, Plant and Equipment(Net PPE) was $1,768 Mil.
Depreciation, Depletion and Amortization(DDA) was $267 Mil.
Selling, General, & Admin. Expense(SGA) was $407 Mil.
Total Current Liabilities was $990 Mil.
Long-Term Debt & Capital Lease Obligation was $2,993 Mil.
Net Income was -189.469 + -73.046 + 25.745 + 0.976 = $-236 Mil.
Non-Recurring Items was 3.987 + -1.433 + 3.438 + 19.365 = $25 Mil.
Cash Flow from Operations was 8.963 + 0.991 + 90.841 + -62.788 = $38 Mil.
Accounts Receivable was $592 Mil.
Revenue was 3045.538 + 2721.97 + 2325.44 + 2685.006 = $10,778 Mil.
Gross Profit was 116.808 + 155.53 + 248.28 + 251.506 = $772 Mil.
Total Current Assets was $1,250 Mil.
Total Assets was $6,074 Mil.
Property, Plant and Equipment(Net PPE) was $1,755 Mil.
(DDA) was $233 Mil.
Selling, General, & Admin. Expense(SGA) was $464 Mil.
Total Current Liabilities was $799 Mil.
Long-Term Debt & Capital Lease Obligation was $3,063 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(841.645 / 14959.615) / (592.074 / 10777.954)
=0.05626114 / 0.0549338
=1.0242

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)
=(772.124 / 10777.954) / (720.047 / 14959.615)
=0.0716392 / 0.04813272
=1.4884

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1546.22 + 1768.485) / 6209.658) / (1 - (1250.299 + 1755.416) / 6073.918)
=0.46620168 / 0.50514396
=0.9229

4. SGI = Sales Growth Index

Ratio of Revenue 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
=14959.615 / 10777.954
=1.388

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(232.793 / (232.793 + 1755.416)) / (267.349 / (267.349 + 1768.485))
=0.11708679 / 0.13132161
=0.8916

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(407.177 / 14959.615) / (463.884 / 10777.954)
=0.02721841 / 0.04304008
=0.6324

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)
=((2993.461 + 989.881) / 6209.658) / ((3063.008 + 798.853) / 6073.918)
=0.64147526 / 0.63581053
=1.0089

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
=(-235.794 - 25.357 - 38.007) / 6209.658
=-0.0482

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.

NGL Energy Partners LP has a M-score of -2.06 signals that the company is likely to be a manipulator.


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