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Newfield Exploration Co (NYSE:NFX)
Beneish M-Score
-8.28 (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 -8.28 suggests that the company is not a manipulator.

NFX' s Beneish M-Score Range Over the Past 10 Years
Min: -8.28   Max: 0.86
Current: -8.28

-8.28
0.86

During the past 13 years, the highest Beneish M-Score of Newfield Exploration Co was 0.86. The lowest was -8.28. 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 * 0.4075+0.528 * 1.113+0.404 * 0.4879+0.892 * 0.7301+0.115 * 0.7396
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4989+4.679 * -0.9704-0.327 * 1.6306
=-8.28

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $133 Mil.
Revenue was 381 + 284 + 362 + 377 = $1,404 Mil.
Gross Profit was 242 + 150 + 191 + 254 = $837 Mil.
Total Current Assets was $638 Mil.
Total Assets was $4,285 Mil.
Property, Plant and Equipment(Net PPE) was $3,573 Mil.
Depreciation, Depletion and Amortization(DDA) was $769 Mil.
Selling, General & Admin. Expense(SGA) was $232 Mil.
Total Current Liabilities was $657 Mil.
Long-Term Debt was $2,430 Mil.
Net Income was -667 + -624 + -663 + -1227 = $-3,181 Mil.
Non Operating Income was -133 + -16 + 28 + 88 = $-33 Mil.
Cash Flow from Operations was 306 + 72 + 320 + 312 = $1,010 Mil.
Accounts Receivable was $447 Mil.
Revenue was 469 + 349 + 495 + 610 = $1,923 Mil.
Gross Profit was 327 + 212 + 252 + 485 = $1,276 Mil.
Total Current Assets was $885 Mil.
Total Assets was $7,458 Mil.
Property, Plant and Equipment(Net PPE) was $6,309 Mil.
Depreciation, Depletion and Amortization(DDA) was $951 Mil.
Selling, General & Admin. Expense(SGA) was $212 Mil.
Total Current Liabilities was $845 Mil.
Long-Term Debt was $2,450 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)
=(133 / 1404) / (447 / 1923)
=0.09472934 / 0.2324493
=0.4075

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)
=(1276 / 1923) / (837 / 1404)
=0.66354654 / 0.59615385
=1.113

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 - (638 + 3573) / 4285) / (1 - (885 + 6309) / 7458)
=0.01726954 / 0.03539823
=0.4879

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
=1404 / 1923
=0.7301

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))
=(951 / (951 + 6309)) / (769 / (769 + 3573))
=0.13099174 / 0.17710732
=0.7396

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)
=(232 / 1404) / (212 / 1923)
=0.16524217 / 0.11024441
=1.4989

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)
=((2430 + 657) / 4285) / ((2450 + 845) / 7458)
=0.72042007 / 0.44180746
=1.6306

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
=(-3181 - -33 - 1010) / 4285
=-0.9704

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 -8.28 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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.40240.58260.65650.42940.38761.35290.49830.89121.56180.4075
GMI 0.87830.77210.70520.99541.08241.17661.27991.17011.1311.113
AQI 0.42470.29040.66891.51653.39915.03223.91211.35130.81320.4879
SGI 1.3461.38481.36441.23211.00390.86040.71640.68050.72220.7301
DEPI 1.13161.11441.01371.04240.99180.76230.59930.51870.54460.7396
SGAI 0.80990.85540.80620.82270.99181.00981.38981.61511.36051.4989
LVGI 0.91550.92570.83940.7760.90450.94081.33211.5741.49321.6306
TATA -0.1044-0.0961-0.0953-0.1139-0.2015-0.411-0.7852-1.0101-0.9734-0.9704
M-score -3.43-3.32-3.12-3.02-2.94-2.49-5.77-7.71-7.05-8.28
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