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GuruFocus has detected 3 Warning Signs with Occidental Petroleum Corp $OXY.
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Occidental Petroleum Corp (NYSE:OXY)
Beneish M-Score
-3.64 (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 Corp has a M-score of -3.64 suggests that the company is not a manipulator.

OXY' s Beneish M-Score Range Over the Past 10 Years
Min: -3.88   Max: -0.95
Current: -3.64

-3.88
-0.95

During the past 13 years, the highest Beneish M-Score of Occidental Petroleum Corp was -0.95. The lowest was -3.88. And the median was -2.75.


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 Corp 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 * 1.5588+0.528 * 1.2375+0.404 * 1.1083+0.892 * 0.6441+0.115 * 0.8411
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4308+4.679 * -0.2939-0.327 * 1.1785
=-3.64

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $3,521 Mil.
Revenue was 2733 + 2558 + 2281 + 2843 = $10,415 Mil.
Gross Profit was 1395 + 1314 + 1000 + 1489 = $5,198 Mil.
Total Current Assets was $8,711 Mil.
Total Assets was $41,630 Mil.
Property, Plant and Equipment(Net PPE) was $30,419 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,494 Mil.
Selling, General & Admin. Expense(SGA) was $1,246 Mil.
Total Current Liabilities was $5,688 Mil.
Long-Term Debt was $8,333 Mil.
Net Income was -241 + -139 + 78 + -5178 = $-5,480 Mil.
Non Operating Income was -246 + -27 + -98 + 3691 = $3,320 Mil.
Cash Flow from Operations was 650 + 1129 + 689 + 965 = $3,433 Mil.
Accounts Receivable was $3,507 Mil.
Revenue was 3246 + 3514 + 3096 + 6314 = $16,170 Mil.
Gross Profit was 1833 + 2034 + 1539 + 4581 = $9,987 Mil.
Total Current Assets was $10,540 Mil.
Total Assets was $50,089 Mil.
Property, Plant and Equipment(Net PPE) was $36,835 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,472 Mil.
Selling, General & Admin. Expense(SGA) was $1,352 Mil.
Total Current Liabilities was $7,433 Mil.
Long-Term Debt was $6,882 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)
=(3521 / 10415) / (3507 / 16170)
=0.33807009 / 0.21688312
=1.5588

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)
=(9987 / 16170) / (5198 / 10415)
=0.61762523 / 0.49908785
=1.2375

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 - (8711 + 30419) / 41630) / (1 - (10540 + 36835) / 50089)
=0.06005285 / 0.05418355
=1.1083

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
=10415 / 16170
=0.6441

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))
=(4472 / (4472 + 36835)) / (4494 / (4494 + 30419))
=0.10826252 / 0.12871996
=0.8411

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)
=(1246 / 10415) / (1352 / 16170)
=0.11963514 / 0.08361163
=1.4308

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)
=((8333 + 5688) / 41630) / ((6882 + 7433) / 50089)
=0.33680038 / 0.28579129
=1.1785

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
=(-5480 - 3320 - 3433) / 41630
=-0.2939

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 Corp has a M-score of -3.64 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 local exchange's currency.

Occidental Petroleum Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.92271.32120.51242.15080.95910.85161.08911.08580.72461.2204
GMI 0.99330.95990.96471.06560.96110.96181.02570.97031.01031.2709
AQI 0.85490.68821.12121.11180.9630.86740.88070.8011.4261.1555
SGI 1.16251.13231.22320.61041.28211.2590.83671.0631.02310.5786
DEPI 0.96340.92511.07140.975311.09011.13120.920.72290.7713
SGAI 0.87970.89820.73621.65750.83760.86651.0721.06330.95151.4603
LVGI 0.82410.97220.89851.03841.2060.93280.96860.99311.2111.177
TATA -0.0549-0.0437-0.0945-0.0684-0.0939-0.0888-0.1031-0.0975-0.1835-0.2548
M-score -2.65-2.40-3.05-2.14-2.78-2.82-3.05-2.91-3.49-3.80

Occidental Petroleum Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.11620.97350.72460.60080.76880.81251.22041.52841.28011.5588
GMI 0.85010.79551.081.06621.22231.35661.18891.24321.23241.2375
AQI 0.87070.99691.4261.58351.57081.52671.15551.01611.06091.1083
SGI 0.99970.90131.02310.97580.88710.87020.57860.59290.61210.6441
DEPI 1.14521.29210.72290.67350.61060.50260.77130.75960.76460.8411
SGAI 0.94440.92910.95151.04511.13781.1971.46031.3871.41091.4308
LVGI 0.98711.00511.2111.12421.21061.24941.1771.21031.18591.1785
TATA -0.0779-0.0689-0.1751-0.1685-0.1597-0.1494-0.2548-0.2654-0.2781-0.2939
M-score -2.84-2.98-3.41-3.47-3.33-3.24-3.85-3.63-3.88-3.64
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