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Newfield Exploration Co (NYSE:NFX)
Beneish M-Score
-7.06 (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 -7.06 suggests that the company is not a manipulator.

NFX' s Beneish M-Score Range Over the Past 10 Years
Min: -7.72   Max: 0.86
Current: -7.06

-7.72
0.86

During the past 13 years, the highest Beneish M-Score of Newfield Exploration Co was 0.86. The lowest was -7.72. And the median was -3.12.


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 * 1.5618+0.528 * 1.1106+0.404 * 0.8132+0.892 * 0.7222+0.115 * 0.5446
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3605+4.679 * -0.9734-0.327 * 1.4932
=-7.06

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $97 Mil.
Revenue was 284 + 362 + 377 + 469 = $1,492 Mil.
Gross Profit was 150 + 191 + 254 + 344 = $939 Mil.
Total Current Assets was $1,088 Mil.
Total Assets was $4,777 Mil.
Property, Plant and Equipment(Net PPE) was $3,573 Mil.
Depreciation, Depletion and Amortization(DDA) was $857 Mil.
Selling, General & Admin. Expense(SGA) was $225 Mil.
Total Current Liabilities was $525 Mil.
Long-Term Debt was $2,429 Mil.
Net Income was -624 + -663 + -1227 + -992 = $-3,506 Mil.
Non Operating Income was -16 + 28 + 88 + -32 = $68 Mil.
Cash Flow from Operations was 72 + 320 + 312 + 372 = $1,076 Mil.
Accounts Receivable was $86 Mil.
Revenue was 349 + 495 + 610 + 612 = $2,066 Mil.
Gross Profit was 212 + 252 + 485 + 495 = $1,444 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.



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)
=(97 / 1492) / (86 / 2066)
=0.0650134 / 0.04162633
=1.5618

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)
=(191 / 2066) / (150 / 1492)
=0.69893514 / 0.62935657
=1.1106

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 - (1088 + 3573) / 4777) / (1 - (1610 + 7779) / 9678)
=0.02428302 / 0.02986154
=0.8132

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
=1492 / 2066
=0.7222

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))
=(916 / (916 + 7779)) / (857 / (857 + 3573))
=0.1053479 / 0.19345372
=0.5446

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)
=(225 / 1492) / (229 / 2066)
=0.15080429 / 0.11084221
=1.3605

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)
=((2429 + 525) / 4777) / ((3146 + 862) / 9678)
=0.61837974 / 0.41413515
=1.4932

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
=(-3506 - 68 - 1076) / 4777
=-0.9734

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 -7.06 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 1.06460.83290.90510.92240.67641.56641.0690.93010.41360.8912
GMI 11111111.36670.93371.2033
AQI 2.07660.31873.22880.39051.13471.0540.83490.85471.51651.3513
SGI 0.94951.06581.24790.60131.40731.31231.03890.69691.27890.6805
DEPI 1.02990.99480.95121.07321.1331.01740.71811.20311.04240.5187
SGAI 1.25571.17290.7291.69832.37840.29251.13431.44150.79261.6151
LVGI 1.07960.86581.59371.03060.92691.01561.15541.05660.7761.574
TATA -0.1798-0.0747-0.2253-0.3801-0.1895-0.1387-0.3093-0.1288-0.1139-1.0101
M-score -2.94-3.19-2.65-5.05-3.44-2.19-4.00-3.35-3.02-7.69

Newfield Exploration Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.64120.40240.58260.65650.42940.38761.35290.49830.89121.5618
GMI 1.0530.87830.77210.70520.99541.08241.16121.25941.15031.1106
AQI 0.85470.42470.29040.66891.51653.39915.03223.91211.35130.8132
SGI 1.01091.3461.38481.36441.23211.00390.86040.71640.68050.7222
DEPI 1.20311.13161.11441.01371.04240.99180.76230.59930.51870.5446
SGAI 1.02670.80990.85540.80620.82270.99181.00981.38981.61511.3605
LVGI 1.05660.91550.92570.83940.7760.90450.94081.33211.5741.4932
TATA -0.1288-0.1044-0.0961-0.0953-0.1139-0.2015-0.411-0.7852-1.0101-0.9734
M-score -3.43-3.43-3.32-3.12-3.02-2.94-2.50-5.78-7.72-7.06
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