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Hess Corp (NYSE:HES)
Beneish M-Score
-2.48 (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.

Hess Corp has a M-score of -2.48 suggests that the company is not a manipulator.

HES' s 10-Year Beneish M-Score Range
Min: -3.29   Max: -1.96
Current: -2.48

-3.29
-1.96

During the past 13 years, the highest Beneish M-Score of Hess Corp was -1.96. The lowest was -3.29. And the median was -2.73.


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 Hess 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 * 0.7476+0.528 * 0.844+0.404 * 0.8757+0.892 * 1.087+0.115 * 1.0486
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0247+4.679 * 0.0463-0.327 * 0.7749
=-2.48

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $3,525 Mil.
Revenue was 15295 + 2703 + 4105 + 4117 = $26,220 Mil.
Gross Profit was 4253 + 1616 + 2877 + 2587 = $11,333 Mil.
Total Current Assets was $8,599 Mil.
Total Assets was $42,754 Mil.
Property, Plant and Equipment(Net PPE) was $28,771 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,770 Mil.
Selling, General & Admin. Expense(SGA) was $1,576 Mil.
Total Current Liabilities was $6,558 Mil.
Long-Term Debt was $5,420 Mil.
Net Income was 1925 + 420 + 1431 + 1276 = $5,052 Mil.
Non Operating Income was -1794 + -5 + 0 + 0 = $-1,799 Mil.
Cash Flow from Operations was 1550 + 1254 + 1247 + 819 = $4,870 Mil.
Accounts Receivable was $4,338 Mil.
Revenue was 14722 + 3118 + 3321 + 2961 = $24,122 Mil.
Gross Profit was 3131 + 1788 + 2116 + 1765 = $8,800 Mil.
Total Current Assets was $8,387 Mil.
Total Assets was $43,441 Mil.
Property, Plant and Equipment(Net PPE) was $28,807 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,922 Mil.
Selling, General & Admin. Expense(SGA) was $1,415 Mil.
Total Current Liabilities was $8,382 Mil.
Long-Term Debt was $7,324 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)
=(3525 / 26220) / (4338 / 24122)
=0.13443936 / 0.17983583
=0.7476

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)
=(1616 / 24122) / (4253 / 26220)
=0.3648122 / 0.43222731
=0.844

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 - (8599 + 28771) / 42754) / (1 - (8387 + 28807) / 43441)
=0.12592974 / 0.14380424
=0.8757

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
=26220 / 24122
=1.087

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))
=(2922 / (2922 + 28807)) / (2770 / (2770 + 28771))
=0.09209241 / 0.0878222
=1.0486

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)
=(1576 / 26220) / (1415 / 24122)
=0.06010679 / 0.05866014
=1.0247

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)
=((5420 + 6558) / 42754) / ((7324 + 8382) / 43441)
=0.28016092 / 0.36154785
=0.7749

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
=(5052 - -1799 - 4870) / 42754
=0.0463

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.

Hess Corp has a M-score of -2.48 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.

Hess Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.05221.16260.85881.07810.70341.26821.04990.9351.38250.8014
GMI 0.97621.1880.83551.02660.94081.01871.01631.06920.58190.932
AQI 1.05581.06010.84640.91590.9970.9440.94191.00260.92490.8757
SGI 1.18271.32821.23391.12761.29750.72011.14521.1360.62621.0139
DEPI 1.13891.05241.07540.93030.87690.94881.18241.11390.96341.0486
SGAI 0.86970.94480.91760.99450.76081.35430.8880.92631.2761.0985
LVGI 1.11231.02680.8750.97830.88340.93890.98010.97011.00320.7749
TATA -0.0809-0.0584-0.099-0.0747-0.083-0.0627-0.0892-0.0686-0.08370.0043
M-score -2.64-2.18-2.95-2.66-2.84-2.84-2.69-2.67-3.16-2.65

Hess Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.98530.9351.09921.54232.00361.38050.45150.40630.30720.7476
GMI 1.33331.06921.06110.8580.58620.58040.5920.69010.87660.844
AQI 0.91791.00261.05721.00160.91840.92490.79790.84180.89060.8757
SGI 1.07261.1360.87930.65640.50880.62710.81771.06691.36281.087
DEPI 1.19161.11391.10191.03990.98190.96340.85490.94280.99281.0486
SGAI 1.00790.92630.96161.03290.95041.27411.20271.15671.24321.0247
LVGI 0.90020.97011.05991.08321.09661.00320.91140.81610.82520.7749
TATA -0.1035-0.0686-0.0731-0.0647-0.0943-0.0828-0.0637-0.044-0.02320.0463
M-score -2.72-2.67-2.78-2.69-2.71-3.15-3.76-3.37-3.00-2.48
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