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Newfield Exploration Company (NYSE:NFX)
Beneish M-Score
-3.07 (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 Company has a M-score of -3.07 suggests that the company is not a manipulator.

NFX' s 10-Year Beneish M-Score Range
Min: -4.48   Max: -1.83
Current: -3.07

-4.48
-1.83

During the past 13 years, the highest Beneish M-Score of Newfield Exploration Company was -1.83. The lowest was -4.48. 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 Company 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 * 0.8871+0.528 * 0.9697+0.404 * 0.8547+0.892 * 1.1822+0.115 * 1.2031
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.882+4.679 * -0.129-0.327 * 1.0566
=-3.07

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $474 Mil.
Revenue was 498 + 486 + 435 + 651 = $2,070 Mil.
Gross Profit was 369 + 363 + 307 + 413 = $1,452 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 $220 Mil.
Total Current Liabilities was $1,290 Mil.
Long-Term Debt was $3,694 Mil.
Net Income was 17 + 27 + 111 + -8 = $147 Mil.
Non Operating Income was -36 + -98 + 119 + -81 = $-96 Mil.
Cash Flow from Operations was 350 + 485 + 251 + 359 = $1,445 Mil.
Accounts Receivable was $452 Mil.
Revenue was 352 + 371 + 350 + 678 = $1,751 Mil.
Gross Profit was 237 + 254 + 232 + 468 = $1,191 Mil.
Total Current Assets was $866 Mil.
Total Assets was $7,912 Mil.
Property, Plant and Equipment(Net PPE) was $6,902 Mil.
Depreciation, Depletion and Amortization(DDA) was $955 Mil.
Selling, General & Admin. Expense(SGA) was $211 Mil.
Total Current Liabilities was $959 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)
=(474 / 2070) / (452 / 1751)
=0.22898551 / 0.25813821
=0.8871

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)
=(363 / 1751) / (369 / 2070)
=0.68018275 / 0.70144928
=0.9697

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 - (901 + 8275) / 9321) / (1 - (866 + 6902) / 7912)
=0.01555627 / 0.0182002
=0.8547

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
=2070 / 1751
=1.1822

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))
=(955 / (955 + 6902)) / (930 / (930 + 8275))
=0.12154766 / 0.10103205
=1.2031

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)
=(220 / 2070) / (211 / 1751)
=0.10628019 / 0.12050257
=0.882

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)
=((3694 + 1290) / 9321) / ((3045 + 959) / 7912)
=0.53470658 / 0.50606673
=1.0566

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
=(147 - -96 - 1445) / 9321
=-0.129

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 Company has a M-score of -3.07 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 Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.38081.14561.0760.82410.90511.50330.7420.87611.85920.8652
GMI 0.98981.00951.0591.01281.01671.06720.99921.11251.00530.9287
AQI 2.54450.67040.69680.94983.22880.39051.13471.0540.83490.8547
SGI 1.33041.30230.94951.06581.24790.60131.40731.31230.59731.2121
DEPI 1.25331.04941.06360.96330.95121.07321.1331.01740.71811.2031
SGAI 0.99480.88731.25571.17290.7291.69830.76980.90371.90940.8563
LVGI 0.98090.89461.07960.86581.59371.03060.92691.01561.15541.0566
TATA -0.1417-0.0909-0.1806-0.0747-0.2253-0.3801-0.1882-0.1387-0.3095-0.1288
M-score -1.84-2.57-3.45-2.94-2.64-4.48-3.10-2.87-3.80-3.08

Newfield Exploration Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.88880.87611.09281.06141.48321.56721.28121.47571.11440.8871
GMI 1.20520.99510.96440.94420.85831.00431.03451.01811.00120.9697
AQI 0.89641.0541.15351.17760.77960.83490.91641.03221.03970.8547
SGI 1.31261.31231.32181.08870.89410.70860.66210.77540.92681.1822
DEPI 1.10211.01740.94080.83550.80920.71810.79250.88240.95811.2031
SGAI 0.84050.90370.931.19411.39981.60951.65911.28351.06390.882
LVGI 1.0551.01560.97021.00140.97531.15541.18411.1161.20321.0566
TATA -0.1282-0.1387-0.1353-0.1231-0.0979-0.3092-0.3296-0.2998-0.3113-0.129
M-score -2.82-2.93-2.68-2.93-2.83-3.92-4.28-3.72-3.96-3.07
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