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Hess Corp (NYSE:HES)
Beneish M-Score
-2.40 (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 -2.40 suggests that the company is not a manipulator.

HES' s 10-Year Beneish M-Score Range
Min: -3.71   Max: -0.89
Current: -2.4

-3.71
-0.89

During the past 13 years, the highest Beneish M-Score of Hess Corp was -0.89. The lowest was -3.71. And the median was -2.68.


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 * 1.5863+0.528 * 0.9758+0.404 * 0.9708+0.892 * 0.8704+0.115 * 0.9748
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4469+4.679 * -0.0562-0.327 * 0.9284
=-2.40

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,698 Mil.
Revenue was 2846 + 5554 + 13101 + 2706 = $24,207 Mil.
Gross Profit was 1342 + 1985 + 2059 + 1619 = $7,005 Mil.
Total Current Assets was $8,767 Mil.
Total Assets was $41,071 Mil.
Property, Plant and Equipment(Net PPE) was $27,236 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,989 Mil.
Selling, General & Admin. Expense(SGA) was $1,874 Mil.
Total Current Liabilities was $5,257 Mil.
Long-Term Debt was $5,953 Mil.
Net Income was 931 + 386 + 1925 + 420 = $3,662 Mil.
Non Operating Income was 754 + -48 + 400 + -8 = $1,098 Mil.
Cash Flow from Operations was 911 + 1158 + 1550 + 1254 = $4,873 Mil.
Accounts Receivable was $1,954 Mil.
Revenue was 3069 + 6106 + 9016 + 9619 = $27,810 Mil.
Gross Profit was 1841 + 2118 + 1006 + 2888 = $7,853 Mil.
Total Current Assets was $9,992 Mil.
Total Assets was $41,428 Mil.
Property, Plant and Equipment(Net PPE) was $26,170 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,792 Mil.
Selling, General & Admin. Expense(SGA) was $1,488 Mil.
Total Current Liabilities was $6,733 Mil.
Long-Term Debt was $5,446 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)
=(2698 / 24207) / (1954 / 27810)
=0.11145536 / 0.0702625
=1.5863

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)
=(1985 / 27810) / (1342 / 24207)
=0.28238044 / 0.28937911
=0.9758

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 - (8767 + 27236) / 41071) / (1 - (9992 + 26170) / 41428)
=0.12339607 / 0.1271121
=0.9708

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
=24207 / 27810
=0.8704

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))
=(2792 / (2792 + 26170)) / (2989 / (2989 + 27236))
=0.09640218 / 0.09889165
=0.9748

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)
=(1874 / 24207) / (1488 / 27810)
=0.07741562 / 0.05350593
=1.4469

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)
=((5953 + 5257) / 41071) / ((5446 + 6733) / 41428)
=0.27294198 / 0.29397992
=0.9284

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
=(3662 - 1098 - 4873) / 41071
=-0.0562

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 -2.40 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.05221.13720.8781.07810.70171.27131.02710.97070.86981.3744
GMI 0.97621.11790.8881.02661.03570.92540.85791.16130.97220.7155
AQI 1.05581.06010.84030.92260.9970.9440.94191.00260.92490.8757
SGI 1.18271.35791.20691.12761.30080.71831.17061.09410.99520.5912
DEPI 1.13891.05241.07540.93030.87690.92881.20791.11390.95541.0574
SGAI 0.86970.81831.06490.98930.75891.35770.86870.96181.00081.5111
LVGI 1.11231.02680.87640.97660.88340.93890.98010.97011.00320.7749
TATA -0.0809-0.0579-0.0994-0.0747-0.0747-0.0705-0.0385-0.0564-0.0994-0.0457
M-score -2.64-2.19-2.96-2.66-2.75-2.92-2.53-2.57-3.12-2.92

Hess Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.93531.04991.02590.86980.40230.57050.75141.2262.44291.5863
GMI 1.26361.18020.96610.97220.8670.82160.79940.77690.82940.9758
AQI 1.05721.00160.91840.92490.79790.84180.89060.87571.00380.9708
SGI 1.03330.96420.99370.99520.91770.75970.55730.66280.71750.8704
DEPI 1.09441.02520.96260.95540.85610.96051.02451.05741.16750.9748
SGAI 0.9791.04840.97391.00081.08151.11411.25231.57291.53321.4469
LVGI 1.05991.08321.09661.00320.91140.81610.82520.77490.81220.9284
TATA -0.0613-0.053-0.0606-0.1007-0.0975-0.105-0.0973-0.0458-0.06-0.0562
M-score -2.64-2.65-2.83-3.13-3.71-3.70-3.69-2.97-1.78-2.40
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