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Devon Energy Corp (NYSE:DVN)
Beneish M-Score
-5.32 (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 -5.32 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: -5.32

-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 * 1.1191+0.528 * 2.1315+0.404 * 1.2585+0.892 * 0.6284+0.115 * 0.8059
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 2.4404+4.679 * -0.6193-0.327 * 1.4769
=-5.32

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $827 Mil.
Revenue was 2126 + 2886 + 3601 + 3393 = $12,006 Mil.
Gross Profit was 616 + -4013 + 3091 + 2831 = $2,525 Mil.
Total Current Assets was $2,950 Mil.
Total Assets was $28,637 Mil.
Property, Plant and Equipment(Net PPE) was $19,264 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,741 Mil.
Selling, General & Admin. Expense(SGA) was $-641 Mil.
Total Current Liabilities was $2,600 Mil.
Long-Term Debt was $12,195 Mil.
Net Income was -3056 + -4532 + -3507 + -2816 = $-13,911 Mil.
Non Operating Income was -30 + 18 + -51 + 4 = $-59 Mil.
Cash Flow from Operations was 149 + 1081 + 1553 + 1101 = $3,884 Mil.
Accounts Receivable was $1,176 Mil.
Revenue was 3265 + 5995 + 5336 + 4510 = $19,106 Mil.
Gross Profit was 1273 + -1388 + 4752 + 3928 = $8,565 Mil.
Total Current Assets was $5,806 Mil.
Total Assets was $45,342 Mil.
Property, Plant and Equipment(Net PPE) was $31,455 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,510 Mil.
Selling, General & Admin. Expense(SGA) was $-418 Mil.
Total Current Liabilities was $5,560 Mil.
Long-Term Debt was $10,301 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)
=(827 / 12006) / (1176 / 19106)
=0.06888223 / 0.06155135
=1.1191

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)
=(-4013 / 19106) / (616 / 12006)
=0.4482885 / 0.21031151
=2.1315

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 - (2950 + 19264) / 28637) / (1 - (5806 + 31455) / 45342)
=0.22429025 / 0.17822328
=1.2585

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
=12006 / 19106
=0.6284

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))
=(3510 / (3510 + 31455)) / (2741 / (2741 + 19264))
=0.1003861 / 0.1245626
=0.8059

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)
=(-641 / 12006) / (-418 / 19106)
=-0.05338997 / -0.02187794
=2.4404

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)
=((12195 + 2600) / 28637) / ((10301 + 5560) / 45342)
=0.51663931 / 0.34980812
=1.4769

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
=(-13911 - -59 - 3884) / 28637
=-0.6193

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 -5.32 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 own currency.

Devon Energy Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.8591.25090.54581.76350.80230.99561.08830.7510.74230.9187
GMI 1.17941.01450.97811.12550.95761.00721.05841.02861.18781.5148
AQI 1.04910.92050.98761.18450.8780.73010.94910.92231.03361.4075
SGI 0.98481.07411.33880.52691.24021.15230.82961.09421.88190.6718
DEPI 1.08841.03270.67241.36061.12921.07490.89161.04811.06260.5943
SGAI 0.24691.2030.95081.88330.70060.90171.42590.81490.72951.5025
LVGI 0.99180.87631.23341.03250.78511.21111.07981.02120.91361.6784
TATA -0.0851-0.0745-0.3622-0.2546-0.0246-0.0367-0.0681-0.126-0.083-0.6702
M-score -2.76-2.55-4.41-3.37-2.50-2.67-2.97-3.20-2.12-5.90

Devon Energy Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.75091.4480.81720.92340.74230.37810.54430.69680.91871.1191
GMI 1.08871.09171.0771.04951.28291.27631.48211.89931.92432.1315
AQI 0.92231.19611.12991.1861.03360.91161.04241.11081.40751.2585
SGI 1.09431.35391.42811.56431.88191.57241.32541.00360.67180.6284
DEPI 1.04811.38721.27831.1171.06260.69680.66550.62760.59430.8059
SGAI 0.33540.34521.31151.5324-0.9582-0.8439-0.207-0.19831.8982.4404
LVGI 1.02121.03181.01121.0190.91360.95541.16861.36511.67841.4769
TATA -0.1266-0.0787-0.0923-0.0802-0.0827-0.1843-0.271-0.4506-0.6702-0.6193
M-score -3.09-1.85-2.63-2.41-1.78-3.00-3.49-4.30-5.75-5.32
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