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Hess Corp (NYSE:HES)
Beneish M-Score
-3.19 (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 -3.19 suggests that the company is not a manipulator.

HES' s 10-Year Beneish M-Score Range
Min: -3.29   Max: -1.96
Current: -3.19

-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 -2.76.


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 * 0.6892+0.528 * 1.1049+0.404 * 0.9003+0.892 * 0.8533+0.115 * 0.8144
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1411+4.679 * -0.0565-0.327 * 0.9965
=-3.19

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $2,073 Mil.
Revenue was 3076 + 2745 + 2846 + 5554 = $14,221 Mil.
Gross Profit was 1845 + 1652 + 1342 + 1985 = $6,824 Mil.
Total Current Assets was $6,687 Mil.
Total Assets was $38,578 Mil.
Property, Plant and Equipment(Net PPE) was $27,517 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,224 Mil.
Selling, General & Admin. Expense(SGA) was $852 Mil.
Total Current Liabilities was $4,851 Mil.
Long-Term Debt was $5,919 Mil.
Net Income was -8 + 1008 + 931 + 386 = $2,317 Mil.
Non Operating Income was -731 + 57 + 754 + -48 = $32 Mil.
Cash Flow from Operations was 1057 + 1338 + 911 + 1158 = $4,464 Mil.
Accounts Receivable was $3,525 Mil.
Revenue was 4771 + 2720 + 3069 + 6106 = $16,666 Mil.
Gross Profit was 3245 + 1632 + 1841 + 2118 = $8,836 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 $2,687 Mil.
Selling, General & Admin. Expense(SGA) was $875 Mil.
Total Current Liabilities was $6,558 Mil.
Long-Term Debt was $5,420 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)
=(2073 / 14221) / (3525 / 16666)
=0.14577034 / 0.21150846
=0.6892

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)
=(1652 / 16666) / (1845 / 14221)
=0.53018121 / 0.47985374
=1.1049

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 - (6687 + 27517) / 38578) / (1 - (8599 + 28771) / 42754)
=0.11338068 / 0.12592974
=0.9003

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
=14221 / 16666
=0.8533

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))
=(2687 / (2687 + 28771)) / (3224 / (3224 + 27517))
=0.08541547 / 0.10487622
=0.8144

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)
=(852 / 14221) / (875 / 16666)
=0.0599114 / 0.0525021
=1.1411

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)
=((5919 + 4851) / 38578) / ((5420 + 6558) / 42754)
=0.27917466 / 0.28016092
=0.9965

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
=(2317 - 32 - 4464) / 38578
=-0.0565

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 -3.19 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.16260.85881.07810.70341.26821.04990.9351.42421.35440.7212
GMI 1.1880.83551.02660.94081.01871.01631.06920.61430.55861.0742
AQI 1.06010.84640.91590.9970.9440.94191.00260.92490.87570.9003
SGI 1.32821.23391.12761.29750.72011.14521.1360.60780.60.8154
DEPI 1.05241.07540.93030.87690.94881.18241.11390.96341.07820.8144
SGAI 0.94480.91760.99450.76081.35430.8880.92631.31450.79271.0714
LVGI 1.02680.8750.97830.88340.93890.98010.97011.00320.77490.9965
TATA -0.0584-0.099-0.0747-0.083-0.0627-0.0892-0.0686-0.09990.0043-0.0557
M-score -2.18-2.95-2.66-2.84-2.84-2.69-2.67-3.20-2.66-3.20

Hess Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 2.01521.42420.36470.4010.30151.143.39622.28832.81040.6892
GMI 0.59260.61430.70180.87721.1090.65010.59030.6030.60251.1049
AQI 0.91840.92490.79790.84180.89060.87571.00380.97080.86940.9003
SGI 0.50590.60780.8621.08091.38870.71280.6060.60340.61250.8533
DEPI 0.98190.96340.85230.94240.99251.07821.19671.00480.9180.8144
SGAI 0.95591.31451.32741.34811.45920.86750.92910.87780.83711.1411
LVGI 1.09661.00320.91140.81610.82520.77490.81220.92840.90670.9965
TATA -0.0968-0.0999-0.0951-0.1026-0.080.0042-0.0084-0.00420.0065-0.0565
M-score -2.71-3.20-3.92-3.57-3.16-2.72-0.78-1.84-1.34-3.19
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