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HollyFrontier Corp (NYSE:HFC)
Beneish M-Score
-2.38 (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 -2.38 suggests that the company is not a manipulator.

HFC' s 10-Year Beneish M-Score Range
Min: -4.61   Max: 1.87
Current: -2.38

-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 -2.28.


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 * 0.9212+0.528 * 1.5762+0.404 * 1.0131+0.892 * 0.9915+0.115 * 0.916
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9049+4.679 * -0.0289-0.327 * 1.007
=-2.38

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $690 Mil.
Revenue was 5317.555 + 5372.6 + 4791.053 + 4826.801 = $20,308 Mil.
Gross Profit was 410.705 + 426.1 + 378.467 + 202.016 = $1,417 Mil.
Total Current Assets was $3,894 Mil.
Total Assets was $10,182 Mil.
Property, Plant and Equipment(Net PPE) was $3,560 Mil.
Depreciation, Depletion and Amortization(DDA) was $342 Mil.
Selling, General & Admin. Expense(SGA) was $118 Mil.
Total Current Liabilities was $1,787 Mil.
Long-Term Debt was $1,039 Mil.
Net Income was 175.006 + 176.429 + 152.061 + 62.902 = $566 Mil.
Non Operating Income was -1.803 + -0.908 + -8.478 + -1.201 = $-12 Mil.
Cash Flow from Operations was 84.454 + 326.55 + 394.929 + 67.011 = $873 Mil.
Accounts Receivable was $756 Mil.
Revenue was 5327.122 + 5298.848 + 4707.789 + 5147.507 = $20,481 Mil.
Gross Profit was 260.814 + 564.498 + 650.155 + 777.527 = $2,253 Mil.
Total Current Assets was $4,410 Mil.
Total Assets was $10,499 Mil.
Property, Plant and Equipment(Net PPE) was $3,312 Mil.
Depreciation, Depletion and Amortization(DDA) was $289 Mil.
Selling, General & Admin. Expense(SGA) was $132 Mil.
Total Current Liabilities was $1,894 Mil.
Long-Term Debt was $1,000 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)
=(690.251 / 20308.009) / (755.672 / 20481.266)
=0.0339891 / 0.03689577
=0.9212

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)
=(426.1 / 20481.266) / (410.705 / 20308.009)
=0.11000267 / 0.06978961
=1.5762

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 - (3893.733 + 3560.265) / 10181.77) / (1 - (4410.135 + 3312.255) / 10498.644)
=0.26790745 / 0.26443929
=1.0131

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
=20308.009 / 20481.266
=0.9915

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))
=(289.087 / (289.087 + 3312.255)) / (341.948 / (341.948 + 3560.265))
=0.08027202 / 0.08762925
=0.916

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)
=(118.265 / 20308.009) / (131.815 / 20481.266)
=0.00582356 / 0.00643588
=0.9049

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)
=((1039.396 + 1786.749) / 10181.77) / ((999.884 + 1893.948) / 10498.644)
=0.27756913 / 0.27563864
=1.007

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
=(566.398 - -12.39 - 872.944) / 10181.77
=-0.0289

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 -2.38 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.01340.9910.75011.29650.38393.20250.75660.78560.33681.1137
GMI 0.75590.94131.00850.9571.22070.80192.27430.41630.80411.9472
AQI 1.0310.32820.81412.23181.53880.81320.88053.86971.02221.0663
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 0.86831.1090.89131.0880.87261.28371.07940.62690.7770.9176
TATA -0.0818-0.07820.0068-0.0647-0.0214-0.0607-0.0491-0.02930.0059-0.0109
M-score -2.47-2.76-2.37-1.86-2.46-1.23-1.65-1.03-2.82-1.88

HollyFrontier Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.29030.34960.33680.81341.2470.99721.11371.02891.01420.9212
GMI 0.6150.87540.80410.74670.94521.34451.94722.4662.41291.5762
AQI 4.09590.97861.02220.96150.9631.05471.06631.04330.98241.0131
SGI 2.0721.57081.30131.1011.02391.02841.00351.0190.9980.9915
DEPI 0.98410.63820.70360.76120.82460.86050.8610.89520.86160.916
SGAI 0.95840.83650.81960.9010.89150.98680.99550.95050.91370.9049
LVGI 0.52920.910.7770.81980.89820.8330.91760.9931.04731.007
TATA 0.0190.0130.00590.0149-0.0076-0.0196-0.0109-0.0413-0.0626-0.0289
M-score -0.88-2.57-2.82-2.59-2.28-2.30-1.88-1.84-2.04-2.38
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