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HollyFrontier Corp (NYSE:HFC)
Beneish M-Score
-2.09 (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 -2.09 signals that the company is a manipulator.

HFC' s 10-Year Beneish M-Score Range
Min: -4.06   Max: -0.74
Current: -2.09

-4.06
-0.74

During the past 13 years, the highest Beneish M-Score of HollyFrontier Corp was -0.74. The lowest was -4.06. And the median was -2.23.


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 * 0.9609+0.528 * 2.4129+0.404 * 0.9824+0.892 * 0.998+0.115 * 0.8616
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9137+4.679 * -0.0626-0.327 * 1.0473
=-2.09

* 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 $799 Mil.
Revenue was 5372.6 + 4791.053 + 4826.801 + 5327.122 = $20,318 Mil.
Gross Profit was 426.1 + 378.467 + 202.016 + 260.814 = $1,267 Mil.
Total Current Assets was $4,236 Mil.
Total Assets was $10,458 Mil.
Property, Plant and Equipment(Net PPE) was $3,493 Mil.
Depreciation, Depletion and Amortization(DDA) was $343 Mil.
Selling, General & Admin. Expense(SGA) was $120 Mil.
Total Current Liabilities was $1,968 Mil.
Long-Term Debt was $1,028 Mil.
Net Income was 176.429 + 152.061 + 62.902 + 82.29 = $474 Mil.
Non Operating Income was -0.908 + -8.478 + -1.201 + 0.159 = $-10 Mil.
Cash Flow from Operations was 326.55 + 394.929 + 67.011 + 350.648 = $1,139 Mil.
Accounts Receivable was $833 Mil.
Revenue was 5298.848 + 4707.789 + 5147.507 + 5204.798 = $20,359 Mil.
Gross Profit was 564.498 + 650.155 + 777.527 + 1072.203 = $3,064 Mil.
Total Current Assets was $4,448 Mil.
Total Assets was $10,494 Mil.
Property, Plant and Equipment(Net PPE) was $3,258 Mil.
Depreciation, Depletion and Amortization(DDA) was $272 Mil.
Selling, General & Admin. Expense(SGA) was $132 Mil.
Total Current Liabilities was $1,880 Mil.
Long-Term Debt was $990 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)
=(799.055 / 20317.576) / (833.236 / 20358.942)
=0.03932826 / 0.04092727
=0.9609

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)
=(378.467 / 20358.942) / (426.1 / 20317.576)
=0.15051779 / 0.06237934
=2.4129

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 - (4236.131 + 3492.743) / 10458.383) / (1 - (4448.152 + 3257.831) / 10493.934)
=0.26098767 / 0.26567263
=0.9824

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
=20317.576 / 20358.942
=0.998

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))
=(272.072 / (272.072 + 3257.831)) / (343.13 / (343.13 + 3492.743))
=0.07707634 / 0.08945291
=0.8616

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)
=(120.053 / 20317.576) / (131.665 / 20358.942)
=0.00590882 / 0.00646718
=0.9137

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)
=((1027.885 + 1967.695) / 10458.383) / ((990.236 + 1879.691) / 10493.934)
=0.2864286 / 0.27348438
=1.0473

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
=(473.682 - -10.428 - 1139.138) / 10458.383
=-0.0626

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 -2.09 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

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.34830.33540.36890.68460.76291.1671.03811.14970.99030.9609
GMI 0.56650.6150.87540.80410.74670.94521.34451.94722.4662.4129
AQI 3.87124.09590.97860.9490.96150.9631.05471.06631.04330.9824
SGI 2.05632.0721.57081.30131.1011.02391.02841.00351.0190.998
DEPI 1.11130.98410.63820.70360.76120.82460.86050.8610.89520.8616
SGAI 0.91160.95840.83650.81960.9010.89150.98680.99550.95050.9137
LVGI 0.5760.52920.910.89290.81980.89820.8330.91760.9931.0473
TATA -0.02780.0190.0130.00590.0149-0.0076-0.0196-0.0109-0.0413-0.0626
M-score -1.17-0.84-2.55-2.57-2.64-2.35-2.27-1.85-1.87-2.09
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