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Hess Corp (NYSE:HES)
Beneish M-Score
-3.05 (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 -3.05 suggests that the company is not a manipulator.

HES' s Beneish M-Score Range Over the Past 10 Years
Min: -3.61   Max: 11.7
Current: -3.05

-3.61
11.7

During the past 13 years, the highest Beneish M-Score of Hess Corp was 11.70. The lowest was -3.61. And the median was -2.72.


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 * 1.0029+0.528 * 1.2998+0.404 * 1.0721+0.892 * 0.6348+0.115 * 1.0494
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2201+4.679 * -0.0809-0.327 * 1.08
=-3.05

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $771 Mil.
Revenue was 1196 + 1269 + 973 + 1462 = $4,900 Mil.
Gross Profit was 526 + 509 + 329 + 610 = $1,974 Mil.
Total Current Assets was $4,893 Mil.
Total Assets was $34,459 Mil.
Property, Plant and Equipment(Net PPE) was $25,537 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,459 Mil.
Selling, General & Admin. Expense(SGA) was $450 Mil.
Total Current Liabilities was $2,617 Mil.
Long-Term Debt was $6,671 Mil.
Net Income was -339 + -392 + -509 + -1821 = $-3,061 Mil.
Non Operating Income was -80 + 0 + 20 + -1306 = $-1,366 Mil.
Cash Flow from Operations was 332 + 197 + -60 + 623 = $1,092 Mil.
Accounts Receivable was $1,211 Mil.
Revenue was 1689 + 1935 + 1538 + 2557 = $7,719 Mil.
Gross Profit was 796 + 1031 + 718 + 1497 = $4,042 Mil.
Total Current Assets was $5,597 Mil.
Total Assets was $36,456 Mil.
Property, Plant and Equipment(Net PPE) was $26,883 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,847 Mil.
Selling, General & Admin. Expense(SGA) was $581 Mil.
Total Current Liabilities was $2,624 Mil.
Long-Term Debt was $6,474 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)
=(771 / 4900) / (1211 / 7719)
=0.15734694 / 0.15688561
=1.0029

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)
=(4042 / 7719) / (1974 / 4900)
=0.52364296 / 0.40285714
=1.2998

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 - (4893 + 25537) / 34459) / (1 - (5597 + 26883) / 36456)
=0.11692156 / 0.10906298
=1.0721

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
=4900 / 7719
=0.6348

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))
=(3847 / (3847 + 26883)) / (3459 / (3459 + 25537))
=0.12518711 / 0.11929232
=1.0494

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)
=(450 / 4900) / (581 / 7719)
=0.09183673 / 0.07526882
=1.2201

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)
=((6671 + 2617) / 34459) / ((6474 + 2624) / 36456)
=0.26953771 / 0.24956111
=1.08

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
=(-3061 - -1366 - 1092) / 34459
=-0.0809

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 -3.05 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 local exchange's currency.

Hess Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.84321.09730.72971.18081.07291.67831.49280.78420.74310.6611
GMI 0.83971.03911.11210.92070.91790.63050.59961.04881.01681.3093
AQI 0.84640.91590.9970.9440.94191.00260.92490.87570.94630.8355
SGI 1.23391.12761.30080.71941.14340.63350.57080.97220.90190.618
DEPI 1.07540.93030.87690.94881.18241.1280.96821.05940.81440.8037
SGAI 0.95380.97930.83741.35560.88931.33850.70711.20180.96871.5327
LVGI 0.8750.97830.88340.93890.98010.97011.00320.77491.00090.9536
TATA -0.099-0.0747-0.0747-0.0749-0.0741-0.0595-0.0996-0.044-0.074-0.098
M-score -2.97-2.64-2.70-3.03-2.65-2.69-3.07-2.89-3.18-3.59

Hess Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 2.30042.36050.90780.50410.69030.55530.66230.69030.91231.0029
GMI 0.8240.82430.86761.10551.17261.2781.28861.29471.35811.2998
AQI 0.97080.86940.94631.00650.98781.00580.83550.8220.91881.0721
SGI 0.71510.72930.73830.86430.80110.71290.61690.6310.61930.6348
DEPI 0.98690.9010.81440.75830.8080.7960.80370.87710.96461.0494
SGAI 0.92430.80290.91021.08221.29121.50651.53551.35761.24391.2201
LVGI 0.92840.90671.00090.94270.96660.93440.95360.96120.9511.08
TATA -0.0534-0.0424-0.074-0.0828-0.0867-0.0898-0.0983-0.0859-0.0805-0.0809
M-score -1.86-1.76-3.24-3.41-3.32-3.51-3.61-3.48-3.15-3.05
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