Switch to:
Newfield Exploration Co (NYSE:NFX)
Beneish M-Score
-3.19 (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 -3.19 suggests that the company is not a manipulator.

NFX' s 10-Year Beneish M-Score Range
Min: -6.21   Max: 0.84
Current: -3.19

-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 * 0.5747+0.528 * 0.9806+0.404 * 0.2904+0.892 * 1.4038+0.115 * 1.1144
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8438+4.679 * -0.0961-0.327 * 0.9257
=-3.19

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $384 Mil.
Revenue was 608 + 553 + 498 + 486 = $2,145 Mil.
Gross Profit was 460 + 417 + 498 + 486 = $1,861 Mil.
Total Current Assets was $528 Mil.
Total Assets was $8,956 Mil.
Property, Plant and Equipment(Net PPE) was $8,365 Mil.
Depreciation, Depletion and Amortization(DDA) was $928 Mil.
Selling, General & Admin. Expense(SGA) was $244 Mil.
Total Current Liabilities was $1,129 Mil.
Long-Term Debt was $3,077 Mil.
Net Income was -22 + 284 + 17 + 27 = $306 Mil.
Non Operating Income was -173 + -94 + -36 + -98 = $-401 Mil.
Cash Flow from Operations was 368 + 365 + 350 + 485 = $1,568 Mil.
Accounts Receivable was $476 Mil.
Revenue was 435 + 370 + 352 + 371 = $1,528 Mil.
Gross Profit was 307 + 270 + 352 + 371 = $1,300 Mil.
Total Current Assets was $759 Mil.
Total Assets was $8,381 Mil.
Property, Plant and Equipment(Net PPE) was $7,419 Mil.
Depreciation, Depletion and Amortization(DDA) was $929 Mil.
Selling, General & Admin. Expense(SGA) was $206 Mil.
Total Current Liabilities was $976 Mil.
Long-Term Debt was $3,276 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 / 2145) / (476 / 1528)
=0.17902098 / 0.31151832
=0.5747

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)
=(417 / 1528) / (460 / 2145)
=0.85078534 / 0.86759907
=0.9806

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 - (528 + 8365) / 8956) / (1 - (759 + 7419) / 8381)
=0.00703439 / 0.02422145
=0.2904

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
=2145 / 1528
=1.4038

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))
=(929 / (929 + 7419)) / (928 / (928 + 8365))
=0.11128414 / 0.09986011
=1.1144

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)
=(244 / 2145) / (206 / 1528)
=0.11375291 / 0.13481675
=0.8438

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)
=((3077 + 1129) / 8956) / ((3276 + 976) / 8381)
=0.4696293 / 0.50733803
=0.9257

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
=(306 - -401 - 1568) / 8956
=-0.0961

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 -3.19 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 1.38291.14561.06460.83290.90510.92240.67641.56641.85920.8652
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 -1.87-2.57-2.93-3.20-2.65-5.58-3.08-2.29-3.80-3.05

Newfield Exploration Co Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.09281.06142.07651.56721.53071.7471.3051.02640.39640.5747
GMI 11111.07451.17541.16111.14611.07460.9806
AQI 1.15351.17760.77960.83490.91641.03221.03970.85470.42470.2904
SGI 1.32181.08870.89410.70860.55410.6550.79141.02171.36661.4038
DEPI 0.94080.83550.80920.71810.79250.88240.95811.20311.13161.1144
SGAI 0.931.19411.39981.60951.97291.51221.23991.01590.79760.8438
LVGI 0.97021.00140.97531.15541.18411.1161.20321.05660.91550.9257
TATA -0.1353-0.1231-0.0979-0.3092-0.3295-0.2997-0.3112-0.1288-0.1044-0.0961
M-score -2.66-2.90-2.21-3.92-4.18-3.54-3.85-3.02-3.31-3.19
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK