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HollyFrontier Corp (NYSE:HFC)
Beneish M-Score
-1.85 (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.

HollyFrontier Corp has a M-score of -1.85 signals that the company is a manipulator.

HFC' s 10-Year Beneish M-Score Range
Min: -3.87   Max: -0.52
Current: -1.85

-3.87
-0.52

During the past 13 years, the highest Beneish M-Score of HollyFrontier Corp was -0.52. The lowest was -3.87. And the median was -2.36.


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 HollyFrontier 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 * 1.1497+0.528 * 1.9472+0.404 * 1.0663+0.892 * 1.0035+0.115 * 0.861
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9955+4.679 * -0.0109-0.327 * 0.9176
=-1.85

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $818 Mil.
Revenue was 4826.801 + 5327.122 + 5298.848 + 4707.789 = $20,161 Mil.
Gross Profit was 202.016 + 260.814 + 564.498 + 650.155 = $1,677 Mil.
Total Current Assets was $3,896 Mil.
Total Assets was $10,057 Mil.
Property, Plant and Equipment(Net PPE) was $3,395 Mil.
Depreciation, Depletion and Amortization(DDA) was $303 Mil.
Selling, General & Admin. Expense(SGA) was $128 Mil.
Total Current Liabilities was $1,674 Mil.
Long-Term Debt was $998 Mil.
Net Income was 62.902 + 82.29 + 256.981 + 333.669 = $736 Mil.
Non Operating Income was -1.201 + 0.159 + -23.198 + 0.059 = $-24 Mil.
Cash Flow from Operations was 67.011 + 350.648 + 202.952 + 248.563 = $869 Mil.
Accounts Receivable was $709 Mil.
Revenue was 5147.507 + 5204.798 + 4806.681 + 4931.738 = $20,091 Mil.
Gross Profit was 777.527 + 1072.203 + 902.191 + 503.194 = $3,255 Mil.
Total Current Assets was $4,470 Mil.
Total Assets was $10,329 Mil.
Property, Plant and Equipment(Net PPE) was $3,195 Mil.
Depreciation, Depletion and Amortization(DDA) was $243 Mil.
Selling, General & Admin. Expense(SGA) was $128 Mil.
Total Current Liabilities was $1,654 Mil.
Long-Term Debt was $1,336 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)
=(818.178 / 20160.56) / (709.187 / 20090.724)
=0.0405831 / 0.03529923
=1.1497

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)
=(260.814 / 20090.724) / (202.016 / 20160.56)
=0.16202079 / 0.08320617
=1.9472

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 - (3896.444 + 3394.596) / 10056.739) / (1 - (4470.265 + 3194.7) / 10328.997)
=0.27500952 / 0.25791778
=1.0663

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
=20160.56 / 20090.724
=1.0035

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))
=(242.868 / (242.868 + 3194.7)) / (303.446 / (303.446 + 3394.596))
=0.07065111 / 0.08205586
=0.861

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)
=(127.963 / 20160.56) / (128.101 / 20090.724)
=0.00634719 / 0.00637613
=0.9955

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)
=((997.519 + 1674.49) / 10056.739) / ((1336.238 + 1654.444) / 10328.997)
=0.26569338 / 0.28954234
=0.9176

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
=(735.842 - -24.181 - 869.174) / 10056.739
=-0.0109

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.

HollyFrontier Corp has a M-score of -1.85 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.

HollyFrontier Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.01340.9910.76711.30140.38213.290.75760.4110.68461.1497
GMI 0.75590.94131.00850.9571.22071.99730.91320.41630.80411.9472
AQI 1.0310.32820.81412.23181.53880.81320.88054.16810.9491.0663
SGI 1.50811.43951.32071.1911.2230.82491.72171.85511.30131.0035
DEPI 0.92830.94271.34741.1941.4670.89540.91861.26140.70360.861
SGAI 0.96640.70830.92670.91290.65721.32330.68190.9140.81960.9955
LVGI 0.86831.1090.89131.0880.87261.28371.07940.54550.89290.9176
TATA -0.0818-0.07820.0068-0.0647-0.0214-0.0607-0.0491-0.03160.0059-0.0109
M-score -2.47-2.76-2.36-1.85-2.46-0.52-2.36-1.24-2.57-1.85

HollyFrontier Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.10450.4110.34830.33540.36890.68460.76291.1671.03811.1497
GMI 0.34680.41630.56650.6150.87540.80410.74670.94521.34451.9472
AQI 3.87084.16813.87124.09590.97860.9490.96150.9631.05471.0663
SGI 1.63111.85512.05632.0721.57081.30131.1011.02391.02841.0035
DEPI 1.44251.26141.11130.98410.63820.70360.76120.82460.86050.861
SGAI 0.89930.9140.91160.95840.83650.81960.9010.89150.98680.9955
LVGI 0.6430.54550.5760.52920.910.89290.81980.89820.8330.9176
TATA -0.0312-0.0316-0.02780.0190.0130.00590.0149-0.0076-0.0196-0.0109
M-score -0.97-1.24-1.17-0.84-2.55-2.57-2.64-2.35-2.27-1.85
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