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Newfield Exploration Co (NYSE:NFX)
Beneish M-Score
-3.08 (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 -3.08 suggests that the company is not a manipulator.

NFX' s 10-Year Beneish M-Score Range
Min: -6.21   Max: 0.84
Current: -3.08

-6.21
0.84

During the past 13 years, the highest Beneish M-Score of Newfield Exploration Co was 0.84. The lowest was -6.21. And the median was -3.04.


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 * 0.6887+0.528 * 0.9996+0.404 * 0.4247+0.892 * 1.3666+0.115 * 1.1316
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7976+4.679 * -0.1044-0.327 * 0.9155
=-3.08

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $384 Mil.
Revenue was 553 + 498 + 486 + 435 = $1,972 Mil.
Gross Profit was 417 + 498 + 486 + 435 = $1,836 Mil.
Total Current Assets was $587 Mil.
Total Assets was $8,651 Mil.
Property, Plant and Equipment(Net PPE) was $7,988 Mil.
Depreciation, Depletion and Amortization(DDA) was $932 Mil.
Selling, General & Admin. Expense(SGA) was $230 Mil.
Total Current Liabilities was $915 Mil.
Long-Term Debt was $3,046 Mil.
Net Income was 284 + 17 + 27 + 111 = $439 Mil.
Non Operating Income was -94 + -36 + -98 + 119 = $-109 Mil.
Cash Flow from Operations was 365 + 350 + 485 + 251 = $1,451 Mil.
Accounts Receivable was $408 Mil.
Revenue was 370 + 352 + 371 + 350 = $1,443 Mil.
Gross Profit was 270 + 352 + 371 + 350 = $1,343 Mil.
Total Current Assets was $672 Mil.
Total Assets was $7,928 Mil.
Property, Plant and Equipment(Net PPE) was $7,092 Mil.
Depreciation, Depletion and Amortization(DDA) was $951 Mil.
Selling, General & Admin. Expense(SGA) was $211 Mil.
Total Current Liabilities was $920 Mil.
Long-Term Debt was $3,045 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)
=(384 / 1972) / (408 / 1443)
=0.19472617 / 0.28274428
=0.6887

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 / 1443) / (417 / 1972)
=0.93069993 / 0.93103448
=0.9996

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 - (587 + 7988) / 8651) / (1 - (672 + 7092) / 7928)
=0.00878511 / 0.02068618
=0.4247

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
=1972 / 1443
=1.3666

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))
=(951 / (951 + 7092)) / (932 / (932 + 7988))
=0.11823946 / 0.1044843
=1.1316

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)
=(230 / 1972) / (211 / 1443)
=0.11663286 / 0.14622315
=0.7976

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)
=((3046 + 915) / 8651) / ((3045 + 920) / 7928)
=0.45786614 / 0.50012614
=0.9155

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
=(439 - -109 - 1451) / 8651
=-0.1044

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 -3.08 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.38291.14561.06460.83290.90511.50330.7420.87611.85920.8652
GMI 1111111111
AQI 2.57740.66572.07660.31873.22880.39051.13471.0540.83490.8547
SGI 1.33041.30230.94951.06581.24790.60131.40731.31230.59731.2121
DEPI 1.24961.05171.02990.99480.95121.07321.1331.01740.71811.2031
SGAI 0.92850.95071.1951.23250.7294.75290.27510.90371.90940.8563
LVGI 0.98120.89461.07960.86581.59371.03060.92691.01561.15541.0566
TATA -0.1537-0.0872-0.1798-0.0747-0.2253-0.3801-0.1895-0.1387-0.3095-0.1288
M-score -1.87-2.57-2.93-3.20-2.65-5.04-3.02-2.93-3.80-3.05

Newfield Exploration Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.87611.09281.06141.48321.56721.53071.7471.3051.02640.6887
GMI 111111.07451.071.06481.05920.9996
AQI 1.0541.15351.17760.77960.83490.91641.03221.03970.85470.4247
SGI 1.31231.32181.08870.89410.70860.55410.6550.79141.02171.3666
DEPI 1.01740.94080.83550.80920.71810.79250.88240.95811.20311.1316
SGAI 0.90370.931.19411.39981.60951.97291.51221.23991.01590.7976
LVGI 1.01560.97021.00140.97531.15541.18411.1161.20321.05660.9155
TATA -0.1387-0.1353-0.1231-0.0979-0.3092-0.3295-0.2997-0.3112-0.1288-0.1044
M-score -2.93-2.66-2.90-2.76-3.92-4.18-3.59-3.90-3.06-3.08
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