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Hess Corp (NYSE:HES)
Beneish M-Score
-3.15 (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 -3.15 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: -3.15

-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 -2.72.


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 * 0.9133+0.528 * 1.3603+0.404 * 0.9188+0.892 * 0.6186+0.115 * 0.9646
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2453+4.679 * -0.0807-0.327 * 0.951
=-3.15

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $843 Mil.
Revenue was 1269 + 973 + 1474 + 1671 = $5,387 Mil.
Gross Profit was 509 + 329 + 622 + 778 = $2,238 Mil.
Total Current Assets was $4,631 Mil.
Total Assets was $34,234 Mil.
Property, Plant and Equipment(Net PPE) was $25,769 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,636 Mil.
Selling, General & Admin. Expense(SGA) was $463 Mil.
Total Current Liabilities was $2,139 Mil.
Long-Term Debt was $6,450 Mil.
Net Income was -392 + -509 + -1821 + -279 = $-3,001 Mil.
Non Operating Income was 0 + 20 + -1318 + 18 = $-1,280 Mil.
Cash Flow from Operations was 197 + -60 + 623 + 282 = $1,042 Mil.
Accounts Receivable was $1,492 Mil.
Revenue was 1935 + 1538 + 2557 + 2678 = $8,708 Mil.
Gross Profit was 1031 + 718 + 1497 + 1675 = $4,921 Mil.
Total Current Assets was $3,926 Mil.
Total Assets was $35,558 Mil.
Property, Plant and Equipment(Net PPE) was $27,298 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,697 Mil.
Selling, General & Admin. Expense(SGA) was $601 Mil.
Total Current Liabilities was $3,493 Mil.
Long-Term Debt was $5,888 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)
=(843 / 5387) / (1492 / 8708)
=0.15648784 / 0.1713367
=0.9133

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)
=(4921 / 8708) / (2238 / 5387)
=0.56511254 / 0.41544459
=1.3603

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 - (4631 + 25769) / 34234) / (1 - (3926 + 27298) / 35558)
=0.11199392 / 0.12188537
=0.9188

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
=5387 / 8708
=0.6186

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))
=(3697 / (3697 + 27298)) / (3636 / (3636 + 25769))
=0.1192773 / 0.12365244
=0.9646

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)
=(463 / 5387) / (601 / 8708)
=0.08594765 / 0.069017
=1.2453

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)
=((6450 + 2139) / 34234) / ((5888 + 3493) / 35558)
=0.25089093 / 0.26382249
=0.951

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
=(-3001 - -1280 - 1042) / 34234
=-0.0807

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 -3.15 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 0.84321.14110.66331.2491.07291.67831.49280.78420.74310.9046
GMI 0.83971.11580.93551.01920.91790.63050.59961.04881.01681.3093
AQI 0.84640.91590.9970.9440.94191.00260.92490.87570.94630.8439
SGI 1.23391.12761.29980.71991.14340.63350.57080.97220.90190.618
DEPI 1.07540.93030.88860.93631.18241.1280.96821.05940.81440.8037
SGAI 0.95381.08050.75951.35460.88931.33850.70711.20180.96871.5327
LVGI 0.8750.97830.88340.93890.98010.97011.00320.77491.00090.9565
TATA -0.099-0.0747-0.0779-0.0749-0.0741-0.0595-0.0996-0.044-0.074-0.0979
M-score -2.97-2.57-2.86-2.91-2.65-2.69-3.07-2.89-3.18-3.37

Hess Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 2.8632.30042.36050.90780.50410.69030.55660.90710.6910.9133
GMI 0.86890.8240.82430.86761.10551.17261.28071.28991.29621.3603
AQI 1.00380.97080.86940.94631.00650.98781.00580.84390.8220.9188
SGI 0.71890.71510.72930.73830.86430.80110.71120.61640.63040.6186
DEPI 1.18650.98690.9010.81440.75830.8080.7960.80370.87710.9646
SGAI 1.06640.92430.80290.91021.08221.29121.511.53691.35891.2453
LVGI 0.81220.92840.90671.00090.94270.96660.93440.95650.96120.951
TATA -0.0574-0.0534-0.0424-0.074-0.0828-0.0867-0.0903-0.0984-0.0861-0.0807
M-score -1.28-1.86-1.76-3.24-3.41-3.32-3.51-3.38-3.48-3.15
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