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Newfield Exploration Co (NYSE:NFX)
Beneish M-Score
-3.01 (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.

Newfield Exploration Co has a M-score of -3.01 suggests that the company is not a manipulator.

NFX' s 10-Year Beneish M-Score Range
Min: -5.84   Max: -1.87
Current: -3.01

-5.84
-1.87

During the past 13 years, the highest Beneish M-Score of Newfield Exploration Co was -1.87. The lowest was -5.84. And the median was -3.07.


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 Newfield Exploration Co 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 * 0.385+0.528 * 0.9868+0.404 * 1.6342+0.892 * 1.2321+0.115 * 1.0424
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8227+4.679 * -0.1137-0.327 * 0.778
=-3.01

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $139 Mil.
Revenue was 517 + 610 + 608 + 553 = $2,288 Mil.
Gross Profit was 463 + 453 + 460 + 417 = $1,793 Mil.
Total Current Assets was $940 Mil.
Total Assets was $9,598 Mil.
Property, Plant and Equipment(Net PPE) was $8,414 Mil.
Depreciation, Depletion and Amortization(DDA) was $903 Mil.
Selling, General & Admin. Expense(SGA) was $222 Mil.
Total Current Liabilities was $1,101 Mil.
Long-Term Debt was $2,892 Mil.
Net Income was 360 + 278 + -22 + 284 = $900 Mil.
Non Operating Income was 567 + 304 + -173 + -94 = $604 Mil.
Cash Flow from Operations was 317 + 337 + 368 + 365 = $1,387 Mil.
Accounts Receivable was $293 Mil.
Revenue was 566 + 486 + 435 + 370 = $1,857 Mil.
Gross Profit was 496 + 363 + 307 + 270 = $1,436 Mil.
Total Current Assets was $901 Mil.
Total Assets was $9,321 Mil.
Property, Plant and Equipment(Net PPE) was $8,275 Mil.
Depreciation, Depletion and Amortization(DDA) was $930 Mil.
Selling, General & Admin. Expense(SGA) was $219 Mil.
Total Current Liabilities was $1,290 Mil.
Long-Term Debt was $3,694 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)
=(139 / 2288) / (293 / 1857)
=0.06075175 / 0.15778137
=0.385

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)
=(453 / 1857) / (463 / 2288)
=0.77329025 / 0.78365385
=0.9868

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 - (940 + 8414) / 9598) / (1 - (901 + 8275) / 9321)
=0.02542196 / 0.01555627
=1.6342

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
=2288 / 1857
=1.2321

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))
=(930 / (930 + 8275)) / (903 / (903 + 8414))
=0.10103205 / 0.09691961
=1.0424

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)
=(222 / 2288) / (219 / 1857)
=0.09702797 / 0.11793215
=0.8227

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)
=((2892 + 1101) / 9598) / ((3694 + 1290) / 9321)
=0.41602417 / 0.53470658
=0.778

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
=(900 - 604 - 1387) / 9598
=-0.1137

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.

Newfield Exploration Co has a M-score of -3.01 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.

Newfield Exploration Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.14561.06460.83290.90510.92240.67641.56641.85920.51520.385
GMI 11111111.47160.87880.9868
AQI 0.66572.07660.31873.22880.39051.13471.0540.83490.85471.6342
SGI 1.30230.94951.06581.24790.60131.40731.31230.59731.25811.2321
DEPI 1.05171.02990.99480.95121.07321.1331.01740.71811.20311.0424
SGAI 0.95071.1951.23250.7294.75290.27510.90371.90940.8250.8227
LVGI 0.89461.07960.86581.59371.03060.92691.01561.15541.05660.778
TATA -0.0872-0.1798-0.0747-0.2253-0.3801-0.1895-0.1387-0.3095-0.1288-0.1137
M-score -2.57-2.93-3.20-2.65-5.58-3.08-2.29-3.55-3.39-3.01

Newfield Exploration Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 2.07651.56721.53071.7471.3050.61120.38310.5570.62970.385
GMI 11.37011.65861.84762.00610.94380.7770.68990.6380.9868
AQI 0.77960.83490.91641.03221.03970.85470.42470.29040.66891.6342
SGI 0.89410.70860.55410.6550.79141.06051.41371.44831.42241.2321
DEPI 0.80920.71810.79250.88240.95811.20311.13161.11441.01371.0424
SGAI 1.39981.60951.97291.51221.23990.97870.7710.81780.77330.8227
LVGI 0.97531.15541.18411.1161.20321.05660.91550.92570.83940.778
TATA -0.0979-0.3092-0.3295-0.2997-0.3112-0.1288-0.1044-0.0961-0.0953-0.1137
M-score -2.21-3.72-3.87-3.18-3.41-3.47-3.44-3.32-3.12-3.01
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