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Newfield Exploration Co (NYSE:NFX)
Beneish M-Score
-2.96 (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 -2.96 suggests that the company is not a manipulator.

NFX' s 10-Year Beneish M-Score Range
Min: -6.21   Max: 0.84
Current: -2.96

-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 -3.08.


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 * 0.3843+0.528 * 1.0284+0.404 * 3.3991+0.892 * 1.0126+0.115 * 0.9918
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9832+4.679 * -0.2015-0.327 * 0.9045
=-2.96

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $86 Mil.
Revenue was 349 + 517 + 610 + 608 = $2,084 Mil.
Gross Profit was 225 + 463 + 453 + 460 = $1,601 Mil.
Total Current Assets was $1,610 Mil.
Total Assets was $9,678 Mil.
Property, Plant and Equipment(Net PPE) was $7,779 Mil.
Depreciation, Depletion and Amortization(DDA) was $916 Mil.
Selling, General & Admin. Expense(SGA) was $229 Mil.
Total Current Liabilities was $862 Mil.
Long-Term Debt was $3,146 Mil.
Net Income was -480 + 360 + 278 + -22 = $136 Mil.
Non Operating Income was 161 + 567 + 304 + -173 = $859 Mil.
Cash Flow from Operations was 205 + 317 + 337 + 368 = $1,227 Mil.
Accounts Receivable was $221 Mil.
Revenue was 571 + 566 + 486 + 435 = $2,058 Mil.
Gross Profit was 460 + 496 + 363 + 307 = $1,626 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.



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)
=(86 / 2084) / (221 / 2058)
=0.04126679 / 0.10738581
=0.3843

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)
=(463 / 2058) / (225 / 2084)
=0.79008746 / 0.76823417
=1.0284

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 - (1610 + 7779) / 9678) / (1 - (587 + 7988) / 8651)
=0.02986154 / 0.00878511
=3.3991

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
=2084 / 2058
=1.0126

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))
=(932 / (932 + 7988)) / (916 / (916 + 7779))
=0.1044843 / 0.1053479
=0.9918

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)
=(229 / 2084) / (230 / 2058)
=0.10988484 / 0.11175899
=0.9832

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)
=((3146 + 862) / 9678) / ((3046 + 915) / 8651)
=0.41413515 / 0.45786614
=0.9045

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
=(136 - 859 - 1227) / 9678
=-0.2015

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 -2.96 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.56721.53071.7471.3050.61120.37980.55250.62490.3820.3843
GMI 1.37011.65861.84762.00610.94380.76310.67870.62810.97121.0284
AQI 0.83490.91641.03221.03970.85470.42470.29040.66891.63423.3991
SGI 0.70860.55410.6550.79141.06051.42621.46011.43341.24181.0126
DEPI 0.71810.79250.88240.95811.20311.13161.11441.01371.04240.9918
SGAI 1.60951.97291.51221.23990.97870.76430.81120.76740.81630.9832
LVGI 1.15541.18411.1161.20321.05660.91550.92570.83940.7780.9045
TATA -0.3092-0.3295-0.2997-0.3112-0.1288-0.1044-0.0961-0.0953-0.1137-0.2015
M-score -3.72-3.87-3.18-3.41-3.47-3.43-3.32-3.12-3.01-2.96
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