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Occidental Petroleum Corporation (NYSE:OXY)
Beneish M-Score
-2.93 (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.

Occidental Petroleum Corporation has a M-score of -2.93 suggests that the company is not a manipulator.

OXY' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -0.96
Current: -2.93

-3.28
-0.96

During the past 13 years, the highest Beneish M-Score of Occidental Petroleum Corporation was -0.96. The lowest was -3.28. And the median was -2.76.


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 Occidental Petroleum Corporation 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 * 1.0877+0.528 * 0.9581+0.404 * 0.801+0.892 * 1.0611+0.115 * 0.9121
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0594+4.679 * -0.0996-0.327 * 0.9931
=-2.93

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $5,674 Mil.
Revenue was 7233 + 6475 + 6121 + 5907 = $25,736 Mil.
Gross Profit was 9202 + 3261 + 2941 + 2770 = $18,174 Mil.
Total Current Assets was $11,323 Mil.
Total Assets was $69,443 Mil.
Property, Plant and Equipment(Net PPE) was $55,821 Mil.
Depreciation, Depletion and Amortization(DDA) was $5,347 Mil.
Selling, General & Admin. Expense(SGA) was $1,801 Mil.
Total Current Liabilities was $8,434 Mil.
Long-Term Debt was $6,939 Mil.
Net Income was 1643 + 1583 + 1322 + 1355 = $5,903 Mil.
Non Operating Income was -17 + -26 + -28 + -35 = $-106 Mil.
Cash Flow from Operations was 3141 + 3561 + 3513 + 2712 = $12,927 Mil.
Accounts Receivable was $4,916 Mil.
Revenue was 6187 + 5991 + 5792 + 6283 = $24,253 Mil.
Gross Profit was 7529 + 2815 + 2732 + 3333 = $16,409 Mil.
Total Current Assets was $9,492 Mil.
Total Assets was $64,210 Mil.
Property, Plant and Equipment(Net PPE) was $52,064 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,511 Mil.
Selling, General & Admin. Expense(SGA) was $1,602 Mil.
Total Current Liabilities was $7,290 Mil.
Long-Term Debt was $7,023 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)
=(5674 / 25736) / (4916 / 24253)
=0.22046938 / 0.20269657
=1.0877

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)
=(3261 / 24253) / (9202 / 25736)
=0.67657609 / 0.70617035
=0.9581

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 - (11323 + 55821) / 69443) / (1 - (9492 + 52064) / 64210)
=0.03310629 / 0.04133313
=0.801

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
=25736 / 24253
=1.0611

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))
=(4511 / (4511 + 52064)) / (5347 / (5347 + 55821))
=0.07973487 / 0.08741499
=0.9121

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)
=(1801 / 25736) / (1602 / 24253)
=0.06997979 / 0.06605368
=1.0594

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)
=((6939 + 8434) / 69443) / ((7023 + 7290) / 64210)
=0.2213758 / 0.2229092
=0.9931

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
=(5903 - -106 - 12927) / 69443
=-0.0996

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.

Occidental Petroleum Corporation has a M-score of -2.93 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.

Occidental Petroleum Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.64461.00540.92271.32120.51242.15080.95910.85160.90621.0877
GMI 0.98110.92230.99330.93420.97241.05840.98660.97681.00970.9581
AQI 1.17020.70420.85490.68821.12121.11180.9630.86740.88070.801
SGI 1.17771.37921.16251.13231.22320.61041.28211.2591.00561.0611
DEPI 0.98281.06440.96340.92511.07140.975311.09010.9140.9121
SGAI 0.92340.99980.87970.89820.73621.65750.83760.86651.04611.0594
LVGI 0.88180.8650.82410.97220.89851.03841.2060.93280.96860.9931
TATA -0.0722-0.0439-0.0759-0.0383-0.0914-0.0654-0.0939-0.0888-0.1033-0.0996
M-score -1.96-2.45-2.75-2.39-3.04-2.13-2.77-2.81-3.10-2.93

Occidental Petroleum Corporation Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.74880.85160.78360.80841.0640.90620.90181.05291.03161.0877
GMI 1.01640.97681.00171.03781.05011.00971.01320.98410.95640.9581
AQI 0.91790.86740.83340.81840.84470.88070.92140.90530.84860.801
SGI 1.28161.2591.21311.10691.0421.00560.969711.02351.0611
DEPI 0.941.09011.00080.9750.96350.9140.91930.90660.91120.9121
SGAI 0.99950.86650.83990.82920.99411.04611.06191.17641.08041.0594
LVGI 0.91150.93280.93291.11211.04720.96860.99240.93830.96630.9931
TATA -0.0865-0.0888-0.0954-0.0969-0.0935-0.1033-0.1028-0.1051-0.1137-0.0996
M-score -2.87-2.81-2.95-3.08-2.88-3.10-3.12-2.99-3.06-2.93
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