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GuruFocus has detected 4 Warning Signs with Chevron Corp $CVX.
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Chevron Corp (NYSE:CVX)
Beneish M-Score
-2.56 (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.

Chevron Corp has a M-score of -2.56 suggests that the company is not a manipulator.

CVX' s Beneish M-Score Range Over the Past 10 Years
Min: -6.14   Max: -0.42
Current: -2.56

-6.14
-0.42

During the past 13 years, the highest Beneish M-Score of Chevron Corp was -0.42. The lowest was -6.14. And the median was -2.58.


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 Chevron 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 * 1.3256+0.528 * 1.0791+0.404 * 1.1771+0.892 * 0.8266+0.115 * 1.041
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1198+4.679 * -0.0582-0.327 * 1.1546
=-2.56

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $14,092 Mil.
Revenue was 31497 + 30140 + 29282 + 23553 = $114,472 Mil.
Gross Profit was 9377 + 9632 + 12220 + 6924 = $38,153 Mil.
Total Current Assets was $29,619 Mil.
Total Assets was $260,078 Mil.
Property, Plant and Equipment(Net PPE) was $182,186 Mil.
Depreciation, Depletion and Amortization(DDA) was $19,457 Mil.
Selling, General & Admin. Expense(SGA) was $9,738 Mil.
Total Current Liabilities was $31,785 Mil.
Long-Term Debt was $35,286 Mil.
Net Income was 415 + 1283 + -1470 + -725 = $-497 Mil.
Non Operating Income was 0 + 0 + 1784 + 0 = $1,784 Mil.
Cash Flow from Operations was 3863 + 5311 + 2531 + 1141 = $12,846 Mil.
Accounts Receivable was $12,860 Mil.
Revenue was 29247 + 34315 + 40357 + 34558 = $138,477 Mil.
Gross Profit was 8707 + 11276 + 17851 + 11970 = $49,804 Mil.
Total Current Assets was $34,430 Mil.
Total Assets was $264,540 Mil.
Property, Plant and Equipment(Net PPE) was $188,396 Mil.
Depreciation, Depletion and Amortization(DDA) was $21,037 Mil.
Selling, General & Admin. Expense(SGA) was $10,520 Mil.
Total Current Liabilities was $25,467 Mil.
Long-Term Debt was $33,622 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)
=(14092 / 114472) / (12860 / 138477)
=0.12310434 / 0.09286741
=1.3256

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)
=(49804 / 138477) / (38153 / 114472)
=0.35965539 / 0.33329548
=1.0791

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 - (29619 + 182186) / 260078) / (1 - (34430 + 188396) / 264540)
=0.1856097 / 0.15768504
=1.1771

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
=114472 / 138477
=0.8266

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))
=(21037 / (21037 + 188396)) / (19457 / (19457 + 182186))
=0.1004474 / 0.09649232
=1.041

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)
=(9738 / 114472) / (10520 / 138477)
=0.08506884 / 0.07596929
=1.1198

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)
=((35286 + 31785) / 260078) / ((33622 + 25467) / 264540)
=0.25788802 / 0.22336509
=1.1546

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
=(-497 - 1784 - 12846) / 260078
=-0.0582

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.

Chevron Corp has a M-score of -2.56 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.

Chevron Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.21110.57161.77590.98210.8481.01051.08850.83571.17621.3256
GMI 1.00041.06041.10410.79311.04420.99671.06910.9610.95811.0828
AQI 0.99960.98660.92020.9050.9440.96010.98871.00191.03271.1771
SGI 1.05131.23590.62871.1941.2380.95350.9460.92620.65330.8266
DEPI 0.98561.06040.84321.00381.16631.09921.09370.94360.83611.041
SGAI 1.10670.78591.2510.88190.8041.04411.00921.07581.51341.2753
LVGI 0.98480.88240.93370.9880.95020.95841.0531.00561.0621.1546
TATA -0.0415-0.0354-0.1033-0.0667-0.0678-0.0542-0.0535-0.046-0.0562-0.0513
M-score -2.45-2.72-2.60-2.76-2.65-2.77-2.67-2.95-3.03-2.55

Chevron Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.96950.83570.87580.96241.01921.17621.23951.26051.2171.3256
GMI 0.92860.88171.01220.92940.92770.9580.9221.06021.08621.0791
AQI 1.00481.00191.02981.01821.01271.03271.02131.11661.19161.1771
SGI 0.9520.92620.85780.77780.69950.65330.65960.66250.72250.8266
DEPI 1.02670.94360.95920.82050.81430.83610.8430.97110.97481.041
SGAI 2.40172.51760.50261.32041.46561.53123.55391.33031.24181.1198
LVGI 1.03531.00561.02271.0041.02871.0621.06311.14161.1171.1546
TATA -0.0555-0.046-0.03-0.0543-0.0548-0.0636-0.0718-0.0616-0.0647-0.0582
M-score -3.10-3.24-2.77-3.07-3.13-3.06-3.41-2.86-2.79-2.56
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