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Hess Corp (NYSE:HES)
Beneish M-Score
-1.98 (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 -1.98 signals that the company is a manipulator.

HES' s 10-Year Beneish M-Score Range
Min: -3.86   Max: -0.89
Current: -1.98

-3.86
-0.89

During the past 13 years, the highest Beneish M-Score of Hess Corp was -0.89. The lowest was -3.86. And the median was -2.69.


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 * 1.8505+0.528 * 1.0804+0.404 * 0.8694+0.892 * 0.9303+0.115 * 0.8961
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1018+4.679 * -0.0456-0.327 * 0.9067
=-1.98

* 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 + 13027 = $24,172 Mil.
Gross Profit was 1652 + 1342 + 1985 + 1986 = $6,965 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 $3,145 Mil.
Selling, General & Admin. Expense(SGA) was $1,807 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 + 399 = $1,162 Mil.
Cash Flow from Operations was 1338 + 911 + 1158 + 1550 = $4,957 Mil.
Accounts Receivable was $1,777 Mil.
Revenue was 2720 + 3069 + 6106 + 14089 = $25,984 Mil.
Gross Profit was 1632 + 1841 + 2118 + 2498 = $8,089 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 $2,760 Mil.
Selling, General & Admin. Expense(SGA) was $1,763 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 / 24172) / (1777 / 25984)
=0.12655138 / 0.06838824
=1.8505

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 / 25984) / (1652 / 24172)
=0.31130696 / 0.28814331
=1.0804

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
=24172 / 25984
=0.9303

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))
=(2760 / (2760 + 27414)) / (3145 / (3145 + 27667))
=0.09146948 / 0.10207062
=0.8961

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)
=(1807 / 24172) / (1763 / 25984)
=0.07475592 / 0.06784945
=1.1018

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 - 1162 - 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 -1.98 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 0.97131.23190.8781.03660.72971.27131.02710.97071.40220.8526
GMI 0.97621.11790.8881.02661.03570.92540.85791.16130.66991.0384
AQI 1.05581.06010.84030.92260.9970.9440.9311.01440.92490.8757
SGI 1.18271.35791.20691.12761.30080.71831.17061.09410.61740.9531
DEPI 1.13891.05241.07540.93030.87690.92881.20791.11390.96341.0486
SGAI 0.86970.81831.06490.98930.75891.35770.86870.96181.29411.1686
LVGI 1.11231.02680.87640.97660.88340.93890.98070.96951.00320.7749
TATA -0.0809-0.0579-0.0994-0.0747-0.0747-0.0705-0.0682-0.0564-0.0999-0.0457
M-score -2.71-2.10-2.96-2.70-2.73-2.92-2.67-2.57-3.18-2.85

Hess Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.61692.12361.40220.35770.39120.29190.76232.24561.50591.8505
GMI 0.89720.62440.66990.77780.98031.25191.13371.04371.08241.0804
AQI 1.00160.91840.92490.79790.84180.89060.87571.00380.97080.8694
SGI 0.62610.48010.61740.8791.1081.43431.06590.91650.91690.9303
DEPI 1.03990.98190.96340.85230.94240.99251.04861.16470.97960.8961
SGAI 1.08281.00741.29411.30181.31521.41281.17881.20581.1511.1018
LVGI 1.08321.09661.00320.91140.81610.82520.77490.81220.92840.9067
TATA -0.0545-0.077-0.0999-0.0951-0.1026-0.08-0.0458-0.06-0.0562-0.0456
M-score -2.59-2.54-3.18-3.86-3.50-3.04-2.79-1.62-2.32-1.98
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