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Newfield Exploration Co (NYSE:NFX)
Beneish M-Score
-5.92 (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 -5.92 suggests that the company is not a manipulator.

NFX' s Beneish M-Score Range Over the Past 10 Years
Min: -6.21   Max: 0.84
Current: -5.92

-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 -3.07.


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 * 0.4983+0.528 * 0.9972+0.404 * 3.912+0.892 * 0.7164+0.115 * 0.5993
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3898+4.679 * -0.7852-0.327 * 1.3321
=-5.92

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $141 Mil.
Revenue was 377 + 469 + 349 + 495 = $1,690 Mil.
Gross Profit was 254 + 344 + 225 + 353 = $1,176 Mil.
Total Current Assets was $663 Mil.
Total Assets was $5,513 Mil.
Property, Plant and Equipment(Net PPE) was $4,586 Mil.
Depreciation, Depletion and Amortization(DDA) was $959 Mil.
Selling, General & Admin. Expense(SGA) was $230 Mil.
Total Current Liabilities was $718 Mil.
Long-Term Debt was $2,498 Mil.
Net Income was -1227 + -992 + -480 + 360 = $-2,339 Mil.
Non Operating Income was 88 + -32 + 161 + 567 = $784 Mil.
Cash Flow from Operations was 312 + 372 + 205 + 317 = $1,206 Mil.
Accounts Receivable was $395 Mil.
Revenue was 610 + 612 + 571 + 566 = $2,359 Mil.
Gross Profit was 485 + 495 + 460 + 197 = $1,637 Mil.
Total Current Assets was $906 Mil.
Total Assets was $9,068 Mil.
Property, Plant and Equipment(Net PPE) was $8,051 Mil.
Depreciation, Depletion and Amortization(DDA) was $931 Mil.
Selling, General & Admin. Expense(SGA) was $231 Mil.
Total Current Liabilities was $925 Mil.
Long-Term Debt was $3,046 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)
=(141 / 1690) / (395 / 2359)
=0.08343195 / 0.16744383
=0.4983

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)
=(344 / 2359) / (254 / 1690)
=0.69393811 / 0.69585799
=0.9972

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 - (663 + 4586) / 5513) / (1 - (906 + 8051) / 9068)
=0.04788681 / 0.01224085
=3.912

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
=1690 / 2359
=0.7164

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))
=(931 / (931 + 8051)) / (959 / (959 + 4586))
=0.10365175 / 0.1729486
=0.5993

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 / 1690) / (231 / 2359)
=0.13609467 / 0.09792285
=1.3898

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)
=((2498 + 718) / 5513) / ((3046 + 925) / 9068)
=0.58334845 / 0.43791354
=1.3321

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
=(-2339 - 784 - 1206) / 5513
=-0.7852

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 -5.92 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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.7471.3050.61120.37980.55150.62380.3850.38761.35290.4983
GMI 1.64831.60611.01070.96670.83750.89730.92150.92210.990.9972
AQI 1.03221.03970.85470.42470.29040.66891.63423.39915.03223.9121
SGI 0.6550.79141.06051.42621.46271.43581.23211.00390.86040.7164
DEPI 0.88240.95811.20311.13161.11441.01371.04240.99180.76230.5993
SGAI 1.51221.23990.97870.76430.80980.76610.82270.99181.00981.3898
LVGI 1.1161.20321.05660.91550.92570.83940.7780.90450.94081.3321
TATA -0.2997-0.3112-0.1288-0.1044-0.0961-0.0953-0.1137-0.2015-0.411-0.7852
M-score -3.29-3.62-3.43-3.33-3.23-2.98-3.05-3.02-2.59-5.92
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