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Hess Corp (NYSE:HES)
Beneish M-Score
-3.47 (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 -3.48 suggests that the company is not a manipulator.

HES' s Beneish M-Score Range Over the Past 10 Years
Min: -3.56   Max: 11.7
Current: -3.47

-3.56
11.7

During the past 13 years, the highest Beneish M-Score of Hess Corp was 11.70. The lowest was -3.56. And the median was -2.71.


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 * 0.6889+0.528 * 1.2916+0.404 * 0.822+0.892 * 0.6323+0.115 * 0.8771
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3549+4.679 * -0.0856-0.327 * 0.9612
=-3.48

* 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 $612 Mil.
Revenue was 973 + 1474 + 1671 + 1953 = $6,071 Mil.
Gross Profit was 329 + 622 + 778 + 1049 = $2,778 Mil.
Total Current Assets was $4,945 Mil.
Total Assets was $34,808 Mil.
Property, Plant and Equipment(Net PPE) was $26,241 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,867 Mil.
Selling, General & Admin. Expense(SGA) was $508 Mil.
Total Current Liabilities was $2,193 Mil.
Long-Term Debt was $6,498 Mil.
Net Income was -509 + -1821 + -279 + -567 = $-3,176 Mil.
Non Operating Income was 20 + -1318 + 18 + -403 = $-1,683 Mil.
Cash Flow from Operations was -60 + 623 + 282 + 640 = $1,485 Mil.
Accounts Receivable was $1,405 Mil.
Revenue was 1538 + 2557 + 2678 + 2829 = $9,602 Mil.
Gross Profit was 718 + 1497 + 1675 + 1785 = $5,675 Mil.
Total Current Assets was $4,323 Mil.
Total Assets was $36,101 Mil.
Property, Plant and Equipment(Net PPE) was $27,208 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,454 Mil.
Selling, General & Admin. Expense(SGA) was $593 Mil.
Total Current Liabilities was $3,467 Mil.
Long-Term Debt was $5,911 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)
=(612 / 6071) / (1405 / 9602)
=0.10080712 / 0.14632368
=0.6889

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)
=(5675 / 9602) / (2778 / 6071)
=0.5910227 / 0.45758524
=1.2916

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 - (4945 + 26241) / 34808) / (1 - (4323 + 27208) / 36101)
=0.10405654 / 0.12658929
=0.822

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
=6071 / 9602
=0.6323

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))
=(3454 / (3454 + 27208)) / (3867 / (3867 + 26241))
=0.11264758 / 0.12843762
=0.8771

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)
=(508 / 6071) / (593 / 9602)
=0.08367649 / 0.06175797
=1.3549

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)
=((6498 + 2193) / 34808) / ((5911 + 3467) / 36101)
=0.24968398 / 0.2597712
=0.9612

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
=(-3176 - -1683 - 1485) / 34808
=-0.0856

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 -3.48 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.81131.14110.66281.251.07290.98510.82631.46961.22050.9046
GMI 0.83971.03911.11210.92070.91791.03760.91320.7030.60531.3093
AQI 0.84640.91590.9970.9440.94191.00260.92490.87570.94630.8439
SGI 1.23391.12761.30080.71941.14341.1360.97990.59120.48180.618
DEPI 1.07540.93030.87690.92881.20791.11390.95541.05740.83740.8037
SGAI 0.95380.97930.83741.35560.88930.92631.01651.51110.77431.5327
LVGI 0.8750.97830.88340.93890.98010.97011.00320.77491.00090.9565
TATA -0.0993-0.0747-0.0747-0.0767-0.0741-0.0595-0.0856-0.039-0.0742-0.0979
M-score -3.00-2.60-2.76-2.97-2.65-2.59-3.14-2.81-3.30-3.37

Hess Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.73162.8632.30042.36050.79650.50410.68890.55530.90460.6889
GMI 1.32030.86890.8240.82430.86761.10551.17071.2781.28611.2916
AQI 0.87571.00380.97080.86940.94631.00650.98781.00580.84390.822
SGI 1.18770.71890.71510.72930.73830.86430.80280.71290.6180.6323
DEPI 1.05941.18650.98690.9010.81440.75830.8080.7960.80370.8771
SGAI 1.27911.06640.92430.80290.91021.08221.28861.50651.53271.3549
LVGI 0.77490.81220.92840.90671.00090.94270.96660.93440.95650.9612
TATA -0.0452-0.0574-0.0534-0.0424-0.074-0.0828-0.0862-0.0898-0.0979-0.0856
M-score -2.62-1.28-1.86-1.76-3.34-3.41-3.32-3.51-3.38-3.48
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