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Hess Corp (NYSE:HES)
Beneish M-Score
-3.14 (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 -3.14 suggests that the company is not a manipulator.

HES' s Beneish M-Score Range Over the Past 10 Years
Min: -3.76   Max: -1.1
Current: -3.14

-3.76
-1.1

During the past 13 years, the highest Beneish M-Score of Hess Corp was -1.10. The lowest was -3.76. And the median was -2.74.


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 * 0.9031+0.528 * 1.435+0.404 * 0.9188+0.892 * 0.6257+0.115 * 0.9644
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3806+4.679 * -0.0807-0.327 * 0.951
=-3.14

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $843 Mil.
Revenue was 1269 + 973 + 1474 + 1671 = $5,387 Mil.
Gross Profit was 509 + 329 + 622 + 778 = $2,238 Mil.
Total Current Assets was $4,631 Mil.
Total Assets was $34,234 Mil.
Property, Plant and Equipment(Net PPE) was $25,769 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,636 Mil.
Selling, General & Admin. Expense(SGA) was $463 Mil.
Total Current Liabilities was $2,139 Mil.
Long-Term Debt was $6,450 Mil.
Net Income was -392 + -509 + -1821 + -279 = $-3,001 Mil.
Non Operating Income was 0 + 20 + -1318 + 18 = $-1,280 Mil.
Cash Flow from Operations was 197 + -60 + 623 + 282 = $1,042 Mil.
Accounts Receivable was $1,492 Mil.
Revenue was 1953 + 1538 + 2374 + 2745 = $8,610 Mil.
Gross Profit was 1049 + 449 + 1983 + 1652 = $5,133 Mil.
Total Current Assets was $3,926 Mil.
Total Assets was $35,558 Mil.
Property, Plant and Equipment(Net PPE) was $27,298 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,696 Mil.
Selling, General & Admin. Expense(SGA) was $536 Mil.
Total Current Liabilities was $3,493 Mil.
Long-Term Debt was $5,888 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)
=(843 / 5387) / (1492 / 8610)
=0.15648784 / 0.17328688
=0.9031

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)
=(5133 / 8610) / (2238 / 5387)
=0.59616725 / 0.41544459
=1.435

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 - (4631 + 25769) / 34234) / (1 - (3926 + 27298) / 35558)
=0.11199392 / 0.12188537
=0.9188

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
=5387 / 8610
=0.6257

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))
=(3696 / (3696 + 27298)) / (3636 / (3636 + 25769))
=0.11924889 / 0.12365244
=0.9644

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)
=(463 / 5387) / (536 / 8610)
=0.08594765 / 0.06225319
=1.3806

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)
=((6450 + 2139) / 34234) / ((5888 + 3493) / 35558)
=0.25089093 / 0.26382249
=0.951

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
=(-3001 - -1280 - 1042) / 34234
=-0.0807

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 -3.14 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.84321.14110.66331.2491.07290.93590.86971.28951.10181.1421
GMI 0.83971.11580.93551.01920.91791.03760.91320.7030.60531.3093
AQI 0.84640.91590.9970.9440.94191.00260.92490.87570.90030.887
SGI 1.23391.12761.29980.71991.14341.1360.97990.59120.48180.618
DEPI 1.07540.93030.88860.91651.20791.11390.95541.05740.83740.8037
SGAI 0.95381.08050.75951.35460.88930.92631.01651.51110.77431.5327
LVGI 0.8750.97830.88340.93890.98010.97011.00320.77490.99650.9608
TATA -0.099-0.0747-0.0779-0.0767-0.0741-0.0595-0.0856-0.039-0.0739-0.0979
M-score -2.97-2.57-2.86-2.92-2.65-2.64-3.10-2.98-3.42-3.13

Hess Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 2.65791.71141.32730.87511.11731.55481.27371.4380.68180.9031
GMI 0.87871.09721.33860.77090.62350.55680.58891.17921.24781.435
AQI 1.00380.97080.86940.90031.00650.98781.00580.8870.8220.9188
SGI 0.77430.96131.2970.60670.38990.35570.31080.49090.63890.6257
DEPI 1.16020.97420.88530.83740.79380.82950.81560.80370.87120.9644
SGAI 1.6181.59141.53390.89110.75720.80410.81881.33181.43791.3806
LVGI 0.81220.92840.90670.99650.94270.96660.93440.96080.96120.951
TATA -0.0543-0.0504-0.0399-0.076-0.0809-0.0862-0.0893-0.0979-0.0877-0.0807
M-score -1.50-2.14-2.05-3.46-3.45-3.16-3.44-3.01-3.52-3.14
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