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Valero Energy Corp (NYSE:VLO)
Beneish M-Score
-3.23 (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.

Valero Energy Corp has a M-score of -3.23 suggests that the company is not a manipulator.

VLO' s 10-Year Beneish M-Score Range
Min: -90.19   Max: 2.16
Current: -3.23

-90.19
2.16

During the past 13 years, the highest Beneish M-Score of Valero Energy Corp was 2.16. The lowest was -90.19. And the median was -2.48.


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 Valero Energy 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 * 0.9246+0.528 * 0.5711+0.404 * 0.9602+0.892 * 0.7813+0.115 * 1.0214
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3553+4.679 * -0.0451-0.327 * 0.9206
=-3.23

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $5,812 Mil.
Revenue was 25118 + 21330 + 27859 + 34408 = $108,715 Mil.
Gross Profit was 2681 + 2083 + 2435 + 2280 = $9,479 Mil.
Total Current Assets was $18,492 Mil.
Total Assets was $47,599 Mil.
Property, Plant and Equipment(Net PPE) was $26,734 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,721 Mil.
Selling, General & Admin. Expense(SGA) was $719 Mil.
Total Current Liabilities was $9,865 Mil.
Long-Term Debt was $7,199 Mil.
Net Income was 1351 + 964 + 1155 + 1059 = $4,529 Mil.
Non Operating Income was 8 + 24 + 9 + 11 = $52 Mil.
Cash Flow from Operations was 2329 + 1433 + 997 + 1866 = $6,625 Mil.
Accounts Receivable was $8,045 Mil.
Revenue was 34914 + 33663 + 34429 + 36137 = $139,143 Mil.
Gross Profit was 1669 + 1932 + 2178 + 1150 = $6,929 Mil.
Total Current Assets was $18,450 Mil.
Total Assets was $47,013 Mil.
Property, Plant and Equipment(Net PPE) was $26,122 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,720 Mil.
Selling, General & Admin. Expense(SGA) was $679 Mil.
Total Current Liabilities was $12,523 Mil.
Long-Term Debt was $5,784 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)
=(5812 / 108715) / (8045 / 139143)
=0.05346088 / 0.05781822
=0.9246

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)
=(2083 / 139143) / (2681 / 108715)
=0.04979769 / 0.08719128
=0.5711

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 - (18492 + 26734) / 47599) / (1 - (18450 + 26122) / 47013)
=0.04985399 / 0.05192181
=0.9602

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
=108715 / 139143
=0.7813

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))
=(1720 / (1720 + 26122)) / (1721 / (1721 + 26734))
=0.06177717 / 0.06048146
=1.0214

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)
=(719 / 108715) / (679 / 139143)
=0.00661362 / 0.00487987
=1.3553

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)
=((7199 + 9865) / 47599) / ((5784 + 12523) / 47013)
=0.35849493 / 0.38940293
=0.9206

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
=(4529 - 52 - 6625) / 47599
=-0.0451

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.

Valero Energy Corp has a M-score of -3.23 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.

Valero Energy Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.3131.13151.61290.31722.16381.00661.23990.83191.08980.6676
GMI 0.93830.78811.14271.58011.52150.90931.01010.87641.12320.734
AQI 1.02330.75630.95740.70750.46150.80171.0021.01081.24751.0034
SGI 1.4761.08711.08771.18680.60231.20681.53211.10530.99160.9476
DEPI 1.20980.86290.90820.92471.03591.01991.06241.0170.90041.0548
SGAI 0.78630.9630.96890.80561.59390.34540.70191.1061.09521.0079
LVGI 0.87840.93451.20530.84221.15871.03171.04880.91010.99190.8436
TATA -0.0738-0.0376-0.0045-0.1261-0.1073-0.0751-0.0465-0.0719-0.0683-0.0144
M-score -2.04-2.66-1.87-3.27-2.36-2.66-1.95-2.92-2.58-2.98

Valero Energy Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.0121.14071.23271.08981.01111.05760.91050.66760.7460.9246
GMI 0.75560.69390.75590.96381.0411.26720.93190.85530.78670.5711
AQI 1.0741.15431.17851.24751.17281.13381.08631.00341.05380.9602
SGI 1.02010.99070.99360.99161.00511.01620.99330.94760.85710.7813
DEPI 1.00570.94580.9250.90040.92850.98171.01991.05481.03081.0214
SGAI 1.15042.96682.89152.6342.53210.36370.37840.41910.4591.3553
LVGI 0.91930.98841.00740.99190.94680.94020.92250.84360.86920.9206
TATA -0.0431-0.0525-0.0175-0.0683-0.0372-0.0319-0.0493-0.0144-0.0376-0.0451
M-score -2.75-3.04-2.75-2.93-2.80-2.24-2.67-2.82-2.97-3.23
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