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Hess Corp (NYSE:HES)
Beneish M-Score
-2.14 (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 -2.14 signals that the company is a manipulator.

HES' s 10-Year Beneish M-Score Range
Min: -3.82   Max: -0.98
Current: -2.14

-3.82
-0.98

During the past 13 years, the highest Beneish M-Score of Hess Corp was -0.98. The lowest was -3.82. And the median was -2.67.


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 * 1.2921+0.528 * 1.2009+0.404 * 0.8694+0.892 * 1.3323+0.115 * 0.8853
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4933+4.679 * -0.0456-0.327 * 0.9067
=-2.14

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $3,059 Mil.
Revenue was 2745 + 2846 + 5554 + 13101 = $24,246 Mil.
Gross Profit was 1652 + 1342 + 1985 + 2059 = $7,038 Mil.
Total Current Assets was $8,865 Mil.
Total Assets was $40,975 Mil.
Property, Plant and Equipment(Net PPE) was $27,667 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,146 Mil.
Selling, General & Admin. Expense(SGA) was $1,894 Mil.
Total Current Liabilities was $5,015 Mil.
Long-Term Debt was $5,929 Mil.
Net Income was 1008 + 931 + 386 + 1925 = $4,250 Mil.
Non Operating Income was 57 + 754 + -48 + 400 = $1,163 Mil.
Cash Flow from Operations was 1338 + 911 + 1158 + 1550 = $4,957 Mil.
Accounts Receivable was $1,777 Mil.
Revenue was 2706 + 3011 + 3466 + 9016 = $18,199 Mil.
Gross Profit was 1619 + 1783 + 1936 + 1006 = $6,344 Mil.
Total Current Assets was $9,257 Mil.
Total Assets was $41,896 Mil.
Property, Plant and Equipment(Net PPE) was $27,414 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,724 Mil.
Selling, General & Admin. Expense(SGA) was $952 Mil.
Total Current Liabilities was $6,923 Mil.
Long-Term Debt was $5,418 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)
=(3059 / 24246) / (1777 / 18199)
=0.12616514 / 0.09764273
=1.2921

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)
=(1342 / 18199) / (1652 / 24246)
=0.34859058 / 0.29027468
=1.2009

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 - (8865 + 27667) / 40975) / (1 - (9257 + 27414) / 41896)
=0.10843197 / 0.12471358
=0.8694

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
=24246 / 18199
=1.3323

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))
=(2724 / (2724 + 27414)) / (3146 / (3146 + 27667))
=0.09038423 / 0.10209976
=0.8853

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)
=(1894 / 24246) / (952 / 18199)
=0.07811598 / 0.05231057
=1.4933

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)
=((5929 + 5015) / 40975) / ((5418 + 6923) / 41896)
=0.26708969 / 0.29456273
=0.9067

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
=(4250 - 1163 - 4957) / 40975
=-0.0456

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 -2.14 signals that the company is likely to 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 1.05221.16260.85881.07810.70341.26821.02710.97070.86981.3744
GMI 0.97621.1880.83551.02660.94081.01870.85791.16130.97220.7155
AQI 1.05581.06010.84640.91590.9970.9440.94191.00260.92490.8757
SGI 1.18271.32821.23391.12761.29750.72011.17061.09410.99520.5912
DEPI 1.13891.05241.07540.93030.87690.92881.20791.11390.95541.0574
SGAI 0.86970.94480.91760.99450.76081.35430.86870.96181.00081.5111
LVGI 1.11231.02680.8750.97830.88340.93890.98010.97011.00320.7749
TATA -0.0809-0.0584-0.099-0.0747-0.083-0.0705-0.0385-0.0564-0.0994-0.0457
M-score -2.64-2.18-2.95-2.66-2.84-2.87-2.53-2.57-3.12-2.92

Hess Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.04991.02590.86980.37140.63180.86271.37442.65241.43241.2921
GMI 1.18020.96610.97220.8170.76530.72250.71550.8851.04761.2009
AQI 1.00160.91840.92490.79790.84180.89060.87571.00380.97080.8694
SGI 0.96420.99370.99520.84660.6860.48530.59120.77590.9641.3323
DEPI 1.02520.96260.95540.85870.96091.02451.05741.16020.97420.8853
SGAI 1.04840.97391.00081.01381.01581.12671.51111.61461.5871.4933
LVGI 1.08321.09661.00320.91140.81610.82520.77490.81220.92840.9067
TATA -0.053-0.0606-0.1007-0.0974-0.1049-0.0973-0.0457-0.06-0.0562-0.0456
M-score -2.65-2.83-3.13-3.82-3.72-3.67-2.92-1.53-2.44-2.14
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