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Nexen, Inc. (NYSE:NXY)
Beneish M-Score
0.00 (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.

Nexen, Inc. has a M-score of -3.36 suggests that the company is not a manipulator.

NXY' s 10-Year Beneish M-Score Range
Min: 0   Max: 0
Current: 0

During the past 13 years, the highest Beneish M-Score of Nexen, Inc. was 0.00. The lowest was 0.00. And the median was 0.00.


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 Nexen, Inc. 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 * 0.818+0.528 * 1.3123+0.404 * 1.239+0.892 * 1.0273+0.115 * -0.1109
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 3.4305+4.679 * -0.1021-0.327 * 0.9264
=-3.36

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

This Year (Dec12) TTM:Last Year (Dec11) TTM:
Accounts Receivable was $1,864 Mil.
Revenue was 1709.67741935 + 1528.87537994 + 1762.32741617 + 1738.16717019 = $6,739 Mil.
Gross Profit was 123.991935484 + 1399.18946302 + 1658.77712032 + 1617.32124874 = $4,799 Mil.
Total Current Assets was $3,597 Mil.
Total Assets was $20,703 Mil.
Property, Plant and Equipment(Net PPE) was $16,076 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,256 Mil.
Selling, General & Admin. Expense(SGA) was $1,080 Mil.
Total Current Liabilities was $3,181 Mil.
Long-Term Debt was $4,323 Mil.
Net Income was -6.04838709677 + 59.7771023303 + 107.495069034 + 172.205438066 = $333 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 271.169354839 + 521.783181358 + 1142.99802761 + 511.581067472 = $2,448 Mil.
Accounts Receivable was $2,218 Mil.
Revenue was 1672.26061204 + 1494.11764706 + 1677.48691099 + 1716.07515658 = $6,560 Mil.
Gross Profit was 1538.005923 + 1386.2745098 + 1560.20942408 + 1646.13778706 = $6,131 Mil.
Total Current Assets was $3,644 Mil.
Total Assets was $19,810 Mil.
Property, Plant and Equipment(Net PPE) was $15,371 Mil.
Depreciation, Depletion and Amortization(DDA) was $-123 Mil.
Selling, General & Admin. Expense(SGA) was $307 Mil.
Total Current Liabilities was $3,384 Mil.
Long-Term Debt was $4,367 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)
=(1863.91129032 / 6739.04738566) / (2218.16386969 / 6559.94032667)
=0.27658379 / 0.33813781
=0.818

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)
=(1399.18946302 / 6559.94032667) / (123.991935484 / 6739.04738566)
=0.9345554 / 0.71215997
=1.3123

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 - (3596.77419355 + 16075.6048387) / 20702.6209677) / (1 - (3643.63277394 + 15371.1747285) / 19810.4639684)
=0.04976384 / 0.04016344
=1.239

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
=6739.04738566 / 6559.94032667
=1.0273

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))
=(-122.513089005 / (-122.513089005 + 15371.1747285)) / (1256.0483871 / (1256.0483871 + 16075.6048387))
=-0.00803435 / 0.07247135
=-0.1109

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)
=(1080.14892003 / 6739.04738566) / (306.501527527 / 6559.94032667)
=0.16028214 / 0.04672322
=3.4305

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)
=((4322.58064516 + 3181.4516129) / 20702.6209677) / ((4367.2260612 + 3384.00789733) / 19810.4639684)
=0.36246774 / 0.39126968
=0.9264

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
=(333.429222334 - 0 - 2447.53163128) / 20702.6209677
=-0.1021

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.

Nexen, Inc. has a M-score of -3.36 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.

Nexen, Inc. Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
DSRI 1.26991.3521.19350.96770.7926
GMI 0.89490.8070.9720.97551.3103
AQI 0.69512.35380.87461.04251.239
SGI 1.34851.17421.3091.42791.0602
DEPI 0.69532.3380.801700
SGAI 1.09374.1051.48930.65513.445
LVGI 1.17350.99170.92880.95770.9264
TATA -0.1088-0.0657-0.0679-0.0965-0.1031
M-score -2.72-2.24-2.49-2.62-3.35

Nexen, Inc. Quarterly Data

Sep10Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12Dec12
DSRI 0.77290.85171.02040.82980.818
GMI 0.94820.95310.96851.00131.3123
AQI 0.32560.36670.39351.12941.239
SGI 0.98750.95071.1151.10511.0273
DEPI 0000-0.1109
SGAI 1.11010.82770.62760.68113.4305
LVGI 0.89610.97251.03610.9140.9264
TATA -0.0821-0.0825-0.0935-0.0814-0.1021
M-score -3.48-3.40-3.12-2.90-3.36
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