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Devon Energy Corp (NYSE:DVN)
Beneish M-Score
-3.70 (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.

Devon Energy Corp has a M-score of -3.70 suggests that the company is not a manipulator.

DVN' s Beneish M-Score Range Over the Past 10 Years
Min: -8.1   Max: 6.59
Current: -3.7

-8.1
6.59

During the past 13 years, the highest Beneish M-Score of Devon Energy Corp was 6.59. The lowest was -8.10. And the median was -2.62.


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 Devon Energy 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 * 1.2166+0.528 * 2.3432+0.404 * 1.0901+0.892 * 0.7219+0.115 * 1.1484
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.5167+4.679 * -0.381-0.327 * 1.1912
=-3.70

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $966 Mil.
Revenue was 4233 + 2488 + 2126 + 2886 = $11,733 Mil.
Gross Profit was 3878 + 734 + 616 + -4013 = $1,215 Mil.
Total Current Assets was $4,451 Mil.
Total Assets was $26,813 Mil.
Property, Plant and Equipment(Net PPE) was $16,169 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,061 Mil.
Selling, General & Admin. Expense(SGA) was $-2,783 Mil.
Total Current Liabilities was $2,851 Mil.
Long-Term Debt was $11,004 Mil.
Net Income was 993 + -1570 + -3056 + -4532 = $-8,165 Mil.
Non Operating Income was -137 + -92 + -30 + 18 = $-241 Mil.
Cash Flow from Operations was 726 + 335 + 149 + 1081 = $2,291 Mil.
Accounts Receivable was $1,100 Mil.
Revenue was 3601 + 3393 + 3265 + 5995 = $16,254 Mil.
Gross Profit was 3091 + 968 + 1273 + -1388 = $3,944 Mil.
Total Current Assets was $4,298 Mil.
Total Assets was $34,351 Mil.
Property, Plant and Equipment(Net PPE) was $22,775 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,398 Mil.
Selling, General & Admin. Expense(SGA) was $-2,542 Mil.
Total Current Liabilities was $3,501 Mil.
Long-Term Debt was $11,400 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)
=(966 / 11733) / (1100 / 16254)
=0.08233188 / 0.06767565
=1.2166

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)
=(3944 / 16254) / (1215 / 11733)
=0.24264796 / 0.10355408
=2.3432

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 - (4451 + 16169) / 26813) / (1 - (4298 + 22775) / 34351)
=0.23097005 / 0.21187156
=1.0901

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
=11733 / 16254
=0.7219

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))
=(3398 / (3398 + 22775)) / (2061 / (2061 + 16169))
=0.12982845 / 0.1130554
=1.1484

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)
=(-2783 / 11733) / (-2542 / 16254)
=-0.23719424 / -0.15639227
=1.5167

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)
=((11004 + 2851) / 26813) / ((11400 + 3501) / 34351)
=0.51672696 / 0.4337865
=1.1912

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
=(-8165 - -241 - 2291) / 26813
=-0.381

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.

Devon Energy Corp has a M-score of -3.70 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.

Devon Energy Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.86851.1550.59911.60660.80230.99641.08760.75090.74230.9187
GMI 1.020.99510.97461.12960.95761.00761.05811.02861.18781.5148
AQI 1.04910.92050.98761.18450.8780.73010.94910.92231.03361.3947
SGI 0.97411.16331.21970.57841.24021.15140.83011.09431.88190.6718
DEPI 1.05080.95130.72781.2571.12921.07490.89161.04811.06260.5943
SGAI 1.40061.11081.03091.73710.70060.90241.42490.81480.72951.5025
LVGI 0.99180.87631.23341.03250.78511.21111.07981.02120.91361.6742
TATA -0.0851-0.0745-0.3708-0.0226-0.0251-0.0367-0.1183-0.1266-0.0827-0.6721
M-score -3.05-2.56-4.52-2.37-2.50-2.67-3.21-3.20-2.12-5.91

Devon Energy Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.81720.92340.74230.37810.54430.69680.91871.11911.24131.2166
GMI 1.0771.04951.28291.27631.97472.79644.64228.13018.08142.3432
AQI 1.12991.1861.03360.91161.04241.11081.39471.25851.19341.0901
SGI 1.42811.56431.88191.57241.32541.00360.67180.62840.61710.7219
DEPI 1.27831.1171.06260.69680.66550.62760.59430.80590.89011.1484
SGAI 1.31151.5324-0.9582-0.8439-0.9238-0.74257.95269.5331.73391.5167
LVGI 1.01121.0190.91360.95541.16861.36511.67421.47691.4821.1912
TATA -0.0923-0.0802-0.0827-0.1843-0.271-0.4506-0.6721-0.6193-0.5736-0.381
M-score -2.63-2.41-1.78-3.00-3.11-3.73-5.37-3.38-1.76-3.70
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