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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: -3.82   Max: -0.98
Current: -3.19

-3.82
-0.98

During the past 13 years, the highest Beneish M-Score of Hess Corp was -0.98. The lowest was -3.82. 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 * 1.3063+0.528 * 0.6592+0.404 * 0.9878+0.892 * 0.4233+0.115 * 0.8291
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8195+4.679 * -0.0668-0.327 * 0.9666
=-3.19

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $1,492 Mil.
Revenue was 1935 + 1550 + 3076 + 2745 = $9,306 Mil.
Gross Profit was 1031 + 461 + 1845 + 1652 = $4,989 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 $536 Mil.
Total Current Liabilities was $3,493 Mil.
Long-Term Debt was $5,888 Mil.
Net Income was -567 + -389 + -8 + 1008 = $44 Mil.
Non Operating Income was -385 + 0 + -731 + 57 = $-1,059 Mil.
Cash Flow from Operations was 714 + 362 + 1057 + 1346 = $3,479 Mil.
Accounts Receivable was $2,698 Mil.
Revenue was 3583 + 2592 + 13101 + 2706 = $21,982 Mil.
Gross Profit was 2539 + 1552 + 2059 + 1619 = $7,769 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 $1,545 Mil.
Total Current Liabilities was $5,257 Mil.
Long-Term Debt was $5,953 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)
=(1492 / 9306) / (2698 / 21982)
=0.16032667 / 0.12273678
=1.3063

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)
=(461 / 21982) / (1031 / 9306)
=0.35342553 / 0.53610574
=0.6592

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 - (3926 + 27298) / 35558) / (1 - (8767 + 27236) / 41071)
=0.12188537 / 0.12339607
=0.9878

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
=9306 / 21982
=0.4233

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))
=(2989 / (2989 + 27236)) / (3697 / (3697 + 27298))
=0.09889165 / 0.1192773
=0.8291

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)
=(536 / 9306) / (1545 / 21982)
=0.05759725 / 0.07028478
=0.8195

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)
=((5888 + 3493) / 35558) / ((5953 + 5257) / 41071)
=0.26382249 / 0.27294198
=0.9666

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
=(44 - -1059 - 3479) / 35558
=-0.0668

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 1.16260.85881.07810.70341.26821.02710.97070.86981.37441.1456
GMI 1.1880.83551.02660.94081.01870.85791.16130.97220.71550.5779
AQI 1.06010.84640.91590.9970.9440.94191.00260.92490.87570.9003
SGI 1.32821.23391.12761.29750.72011.17061.09410.99520.59120.5133
DEPI 1.05241.07540.93030.87690.92881.20791.11390.95541.05740.8374
SGAI 0.94480.91760.99450.76081.35430.86870.96181.00081.51110.7268
LVGI 1.02680.8750.97830.88340.93890.98010.97011.00320.77490.9965
TATA -0.0584-0.099-0.0747-0.083-0.0705-0.0385-0.0564-0.0994-0.0457-0.0557
M-score -2.18-2.95-2.66-2.84-2.87-2.53-2.57-3.12-2.92-3.27

Hess Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.37140.63180.86271.37443.01931.57741.42271.09240.85151.3063
GMI 0.8170.76530.72250.71550.82550.85780.98390.52480.55230.6592
AQI 0.79790.84180.89060.87571.00380.97080.86940.90031.00650.9878
SGI 0.84660.6860.48530.59120.68160.87541.210.53830.51160.4233
DEPI 0.85870.96091.02451.05741.170.97450.88530.83740.78190.8291
SGAI 1.01381.01581.12671.51111.53971.44081.35860.61650.65770.8195
LVGI 0.91140.81610.82520.77490.81220.92840.90670.99650.94270.9666
TATA -0.0974-0.1049-0.0973-0.0457-0.0611-0.0388-0.0284-0.0382-0.0402-0.0668
M-score -3.82-3.72-3.67-2.92-1.29-2.38-2.14-3.23-3.42-3.19
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