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Newfield Exploration Co (NYSE:NFX)
Beneish M-Score
-7.73 (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 -7.73 suggests that the company is not a manipulator.

NFX' s Beneish M-Score Range Over the Past 10 Years
Min: -7.73   Max: -1.88
Current: -7.73

-7.73
-1.88

During the past 13 years, the highest Beneish M-Score of Newfield Exploration Co was -1.88. The lowest was -7.73. And the median was -3.09.


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 * 0.8912+0.528 * 1.1355+0.404 * 1.3513+0.892 * 0.6805+0.115 * 0.5187
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6151+4.679 * -1.0101-0.327 * 1.574
=-7.73

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $94 Mil.
Revenue was 362 + 377 + 469 + 349 = $1,557 Mil.
Gross Profit was 191 + 254 + 344 + 225 = $1,014 Mil.
Total Current Assets was $625 Mil.
Total Assets was $4,768 Mil.
Property, Plant and Equipment(Net PPE) was $3,991 Mil.
Depreciation, Depletion and Amortization(DDA) was $917 Mil.
Selling, General & Admin. Expense(SGA) was $244 Mil.
Total Current Liabilities was $647 Mil.
Long-Term Debt was $2,467 Mil.
Net Income was -663 + -1227 + -992 + -480 = $-3,362 Mil.
Non Operating Income was 28 + 88 + -32 + 161 = $245 Mil.
Cash Flow from Operations was 320 + 312 + 372 + 205 = $1,209 Mil.
Accounts Receivable was $155 Mil.
Revenue was 495 + 610 + 612 + 571 = $2,288 Mil.
Gross Profit was 252 + 485 + 495 + 460 = $1,692 Mil.
Total Current Assets was $940 Mil.
Total Assets was $9,580 Mil.
Property, Plant and Equipment(Net PPE) was $8,414 Mil.
Depreciation, Depletion and Amortization(DDA) was $903 Mil.
Selling, General & Admin. Expense(SGA) was $222 Mil.
Total Current Liabilities was $1,101 Mil.
Long-Term Debt was $2,874 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)
=(94 / 1557) / (155 / 2288)
=0.06037251 / 0.06774476
=0.8912

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)
=(254 / 2288) / (191 / 1557)
=0.73951049 / 0.65125241
=1.1355

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 - (625 + 3991) / 4768) / (1 - (940 + 8414) / 9580)
=0.03187919 / 0.02359081
=1.3513

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
=1557 / 2288
=0.6805

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))
=(903 / (903 + 8414)) / (917 / (917 + 3991))
=0.09691961 / 0.18683782
=0.5187

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 / 1557) / (222 / 2288)
=0.15671162 / 0.09702797
=1.6151

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)
=((2467 + 647) / 4768) / ((2874 + 1101) / 9580)
=0.65310403 / 0.41492693
=1.574

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
=(-3362 - 245 - 1209) / 4768
=-1.0101

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 -7.73 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.06460.83290.90510.92240.67642.22191.23850.54530.42940.8912
GMI 111111.32371.0270.99930.99541.1355
AQI 2.07660.31873.22880.39051.13471.0540.83490.85471.51651.3513
SGI 0.94951.06581.24790.60131.40730.92510.89671.18891.23210.6805
DEPI 1.02810.99480.95121.07321.1331.01740.71811.20311.04240.5187
SGAI 1.21841.23252.0990.58980.76981.24721.30730.8730.82271.6151
LVGI 1.07960.86581.59371.03060.92691.01561.15541.05660.7761.574
TATA -0.1798-0.0747-0.2253-0.3801-0.1882-0.1387-0.3094-0.1288-0.1139-1.0101
M-score -2.93-3.20-2.89-4.86-3.16-1.92-3.99-3.36-3.02-7.73

Newfield Exploration Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.80460.64120.40240.58260.65650.42940.38761.35290.49830.8912
GMI 1.22511.0530.87830.77210.70520.99541.07281.14961.24421.1355
AQI 1.03970.85470.42470.29040.66891.51653.39915.03223.91211.3513
SGI 1.28361.01091.3461.38481.36441.23211.00390.86040.71640.6805
DEPI 0.95811.20311.13161.11441.01371.04240.99180.76230.59930.5187
SGAI 0.78281.02670.80990.85540.80620.82270.99181.00981.38981.6151
LVGI 1.20321.05660.91550.92570.83940.7760.90450.94081.33211.574
TATA -0.3111-0.1288-0.1044-0.0961-0.0953-0.1139-0.2015-0.411-0.7852-1.0101
M-score -3.76-3.43-3.43-3.32-3.12-3.02-2.94-2.50-5.78-7.73
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