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Newfield Exploration Co (NYSE:NFX)
Beneish M-Score
-3.12 (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 -3.12 suggests that the company is not a manipulator.

NFX' s 10-Year Beneish M-Score Range
Min: -6.21   Max: 0.84
Current: -3.12

-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 -3.11.


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 * 0.6297+0.528 * 0.638+0.404 * 0.6689+0.892 * 1.4224+0.115 * 1.0137
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7733+4.679 * -0.0953-0.327 * 0.8394
=-3.12

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $395 Mil.
Revenue was 610 + 608 + 553 + 566 = $2,337 Mil.
Gross Profit was 453 + 460 + 417 + 496 = $1,826 Mil.
Total Current Assets was $906 Mil.
Total Assets was $9,068 Mil.
Property, Plant and Equipment(Net PPE) was $8,051 Mil.
Depreciation, Depletion and Amortization(DDA) was $931 Mil.
Selling, General & Admin. Expense(SGA) was $231 Mil.
Total Current Liabilities was $925 Mil.
Long-Term Debt was $3,046 Mil.
Net Income was 278 + -22 + 284 + 17 = $557 Mil.
Non Operating Income was 304 + -173 + -94 + -36 = $1 Mil.
Cash Flow from Operations was 337 + 368 + 365 + 350 = $1,420 Mil.
Accounts Receivable was $441 Mil.
Revenue was 486 + 435 + 370 + 352 = $1,643 Mil.
Gross Profit was 363 + 307 + 270 + -121 = $819 Mil.
Total Current Assets was $773 Mil.
Total Assets was $8,743 Mil.
Property, Plant and Equipment(Net PPE) was $7,810 Mil.
Depreciation, Depletion and Amortization(DDA) was $917 Mil.
Selling, General & Admin. Expense(SGA) was $210 Mil.
Total Current Liabilities was $1,076 Mil.
Long-Term Debt was $3,485 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)
=(395 / 2337) / (441 / 1643)
=0.16902011 / 0.26841144
=0.6297

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)
=(460 / 1643) / (453 / 2337)
=0.49847839 / 0.7813436
=0.638

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 - (906 + 8051) / 9068) / (1 - (773 + 7810) / 8743)
=0.01224085 / 0.01830035
=0.6689

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
=2337 / 1643
=1.4224

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))
=(917 / (917 + 7810)) / (931 / (931 + 8051))
=0.1050762 / 0.10365175
=1.0137

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)
=(231 / 2337) / (210 / 1643)
=0.09884467 / 0.12781497
=0.7733

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)
=((3046 + 925) / 9068) / ((3485 + 1076) / 8743)
=0.43791354 / 0.52167448
=0.8394

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
=(557 - 1 - 1420) / 9068
=-0.0953

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 -3.12 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 0.66572.07660.31873.22880.39051.13471.0540.83490.85472.8531
SGI 1.30230.94951.06581.24790.60131.40731.31230.59731.25811.2321
DEPI 1.05171.02990.99480.95121.07321.1331.01740.71811.20311.0221
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 -2.57-2.93-3.20-2.65-5.58-3.08-2.29-3.55-3.39-2.52

Newfield Exploration Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 2.07651.56721.53071.7471.3050.61120.38310.5570.62970.3888
GMI 11.37011.65861.84762.00610.94380.7770.68990.6381.0362
AQI 0.77960.83490.91641.03221.03970.85470.42470.29040.66892.8531
SGI 0.89410.70860.55410.6550.79141.06051.41371.44831.42241.2202
DEPI 0.80920.71810.79250.88240.95811.20311.13161.11441.01370.6315
SGAI 1.39981.60951.97291.51221.23990.97870.7710.81780.77330.8307
LVGI 0.97531.15541.18411.1161.20321.05660.91550.92570.83940.778
TATA -0.0979-0.3092-0.3295-0.2997-0.3112-0.1288-0.1044-0.0961-0.0953-0.2252
M-score -2.21-3.72-3.87-3.18-3.41-3.47-3.44-3.32-3.12-3.07
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