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HollyFrontier Corp (NYSE:HFC)
Beneish M-Score
-2.73 (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 -2.73 suggests that the company is not a manipulator.

HFC' s 10-Year Beneish M-Score Range
Min: -4.61   Max: 1.87
Current: -2.73

-4.61
1.87

During the past 13 years, the highest Beneish M-Score of HollyFrontier Corp was 1.87. The lowest was -4.61. 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 * 0.9998+0.528 * 0.7314+0.404 * 1.1552+0.892 * 0.8027+0.115 * 1.0802
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1934+4.679 * -0.0066-0.327 * 0.8298
=-2.73

* 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 $626 Mil.
Revenue was 3701.912 + 3006.626 + 4283.119 + 5317.555 = $16,309 Mil.
Gross Profit was 703.752 + 498.203 + -221.748 + 410.705 = $1,391 Mil.
Total Current Assets was $2,520 Mil.
Total Assets was $9,145 Mil.
Property, Plant and Equipment(Net PPE) was $3,868 Mil.
Depreciation, Depletion and Amortization(DDA) was $349 Mil.
Selling, General & Admin. Expense(SGA) was $115 Mil.
Total Current Liabilities was $1,240 Mil.
Long-Term Debt was $933 Mil.
Net Income was 360.824 + 226.876 + -222.204 + 175.006 = $541 Mil.
Non Operating Income was 0.136 + -7.041 + 2.371 + -1.803 = $-6 Mil.
Cash Flow from Operations was 323.048 + 246.892 + -47.337 + 84.454 = $607 Mil.
Accounts Receivable was $780 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.



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)
=(626.107 / 16309.212) / (780.18 / 20317.576)
=0.03838978 / 0.03839927
=0.9998

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)
=(498.203 / 20317.576) / (703.752 / 16309.212)
=0.06237934 / 0.08528383
=0.7314

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 - (2519.539 + 3868.395) / 9145.286) / (1 - (4236.131 + 3492.743) / 10458.383)
=0.30150528 / 0.26098767
=1.1552

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
=16309.212 / 20317.576
=0.8027

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))
=(343.13 / (343.13 + 3492.743)) / (349.258 / (349.258 + 3868.395))
=0.08945291 / 0.08280861
=1.0802

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)
=(115.007 / 16309.212) / (120.053 / 20317.576)
=0.00705166 / 0.00590882
=1.1934

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)
=((933.162 + 1240.491) / 9145.286) / ((1027.885 + 1967.695) / 10458.383)
=0.23768016 / 0.2864286
=0.8298

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
=(540.502 - -6.337 - 607.057) / 9145.286
=-0.0066

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 -2.73 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.

HollyFrontier Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.9910.75011.29650.38393.20250.75660.38480.68761.11370.8489
GMI 0.94131.00850.9571.22071.99730.91320.41630.80411.94721.6552
AQI 0.32820.81412.23181.53880.81320.88054.16810.9491.06631.094
SGI 1.43951.32071.1911.2230.82491.72171.85511.30131.00350.9803
DEPI 0.94271.34741.1941.4670.89540.91861.26140.70360.8610.9109
SGAI 0.70830.92670.91290.65721.32330.68190.9140.81960.99550.9136
LVGI 1.1090.89131.0880.87261.28371.07940.54550.89290.91760.9404
TATA -0.07820.0068-0.0647-0.0214-0.0607-0.0491-0.03160.0059-0.0109-0.0508
M-score -2.76-2.37-1.86-2.46-0.60-2.36-1.27-2.56-1.88-2.47

HollyFrontier Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.81341.2470.99721.11371.02891.01420.92120.84890.86180.9998
GMI 0.74670.94521.34451.94722.4662.41291.57621.65521.12160.7314
AQI 0.96150.9631.05471.06631.04330.98241.01311.0941.12581.1552
SGI 1.1011.02391.02841.00351.0190.9980.99150.98030.88820.8027
DEPI 0.76120.82460.86050.8610.89520.86160.9160.91090.94981.0802
SGAI 0.9010.89150.98680.99550.95050.91370.90490.91361.05041.1934
LVGI 0.81980.89820.8330.91760.9931.04731.0070.94040.85780.8298
TATA 0.0149-0.0076-0.0196-0.0109-0.0413-0.0626-0.0289-0.0508-0.0267-0.0066
M-score -2.59-2.28-2.30-1.88-1.84-2.04-2.38-2.47-2.68-2.73
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