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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 -3.65 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Hess Corp was -0.98. The lowest was -3.86. And the median was -2.71.
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||+||0.528 * 1.0435||+||0.404 * 0.9987||+||0.892 * 0.9166||+||0.115 * 1.5483|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.2266||+||4.679 * -0.0597||-||0.327 * 0.8231|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $0 Mil.|
Revenue was 5554 + 13101 + 2706 + 3011 = $24,372 Mil.
Gross Profit was 1985 + 2059 + 1619 + 1783 = $7,446 Mil.
Total Current Assets was $7,260 Mil.
Total Assets was $41,636 Mil.
Property, Plant and Equipment(Net PPE) was $29,166 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,081 Mil.
Selling, General & Admin. Expense(SGA) was $1,873 Mil.
Total Current Liabilities was $6,193 Mil.
Long-Term Debt was $5,434 Mil.
Net Income was 386 + 1925 + 420 + 1431 = $4,162 Mil.
Non Operating Income was -48 + 400 + -8 + 1094 = $1,438 Mil.
Cash Flow from Operations was 1158 + 1550 + 1254 + 1247 = $5,209 Mil.
|Accounts Receivable was $1,840 Mil.
Revenue was 6106 + 14089 + 3072 + 3324 = $26,591 Mil.
Gross Profit was 2118 + 2498 + 1742 + 2119 = $8,477 Mil.
Total Current Assets was $11,418 Mil.
Total Assets was $42,379 Mil.
Property, Plant and Equipment(Net PPE) was $25,651 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,949 Mil.
Selling, General & Admin. Expense(SGA) was $1,666 Mil.
Total Current Liabilities was $8,906 Mil.
Long-Term Debt was $5,472 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(0 / 24372)||/||(1840 / 26591)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(2059 / 26591)||/||(1985 / 24372)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (7260 + 29166) / 41636)||/||(1 - (11418 + 25651) / 42379)|
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.
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))|
|=||(2949 / (2949 + 25651))||/||(2081 / (2081 + 29166))|
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)|
|=||(1873 / 24372)||/||(1666 / 26591)|
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)|
|=||((5434 + 6193) / 41636)||/||((5472 + 8906) / 42379)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(4162 - 1438||-||5209)||/||41636|
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 -3.65 suggests that the company will not be a manipulator.
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
Hess Corp Annual Data
Hess Corp Quarterly Data