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Valero Energy Corp (NYSE:VLO)
Beneish M-Score
-2.60 (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 -2.60 suggests that the company is not a manipulator.

VLO' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -1.49
Current: -2.6

-3.28
-1.49

During the past 13 years, the highest Beneish M-Score of Valero Energy Corp was -1.49. The lowest was -3.28. And the median was -2.13.


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 * 1.0674+0.528 * 1.1122+0.404 * 1.2475+0.892 * 0.9916+0.115 * 0.9004
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0096+4.679 * -0.0683-0.327 * 0.9919
=-2.60

* 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 $8,823 Mil.
Revenue was 34429 + 36137 + 34034 + 33474 = $138,074 Mil.
Gross Profit was 2178 + 1150 + 2511 + 1667 = $7,506 Mil.
Total Current Assets was $19,277 Mil.
Total Assets was $47,260 Mil.
Property, Plant and Equipment(Net PPE) was $25,707 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,720 Mil.
Selling, General & Admin. Expense(SGA) was $1,823 Mil.
Total Current Liabilities was $13,123 Mil.
Long-Term Debt was $6,261 Mil.
Net Income was 1288 + 312 + 466 + 654 = $2,720 Mil.
Non Operating Income was 342 + 17 + 11 + 14 = $384 Mil.
Cash Flow from Operations was 2529 + 221 + 1265 + 1549 = $5,564 Mil.
Accounts Receivable was $8,336 Mil.
Revenue was 34695 + 34726 + 34662 + 35167 = $139,250 Mil.
Gross Profit was 2233 + 2230 + 3041 + 915 = $8,419 Mil.
Total Current Assets was $16,460 Mil.
Total Assets was $44,477 Mil.
Property, Plant and Equipment(Net PPE) was $26,300 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,574 Mil.
Selling, General & Admin. Expense(SGA) was $1,821 Mil.
Total Current Liabilities was $11,929 Mil.
Long-Term Debt was $6,463 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)
=(8823 / 138074) / (8336 / 139250)
=0.06390052 / 0.05986355
=1.0674

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)
=(1150 / 139250) / (2178 / 138074)
=0.06045961 / 0.05436215
=1.1122

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 - (19277 + 25707) / 47260) / (1 - (16460 + 26300) / 44477)
=0.04815912 / 0.03860422
=1.2475

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
=138074 / 139250
=0.9916

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))
=(1574 / (1574 + 26300)) / (1720 / (1720 + 25707))
=0.05646839 / 0.06271193
=0.9004

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)
=(1823 / 138074) / (1821 / 139250)
=0.01320307 / 0.0130772
=1.0096

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)
=((6261 + 13123) / 47260) / ((6463 + 11929) / 44477)
=0.41015658 / 0.4135171
=0.9919

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
=(2720 - 384 - 5564) / 47260
=-0.0683

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 -2.60 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.96291.33881.11781.60120.33872.64290.82931.18170.84571.0674
GMI 0.83750.93830.78811.14271.58011.85230.7471.01010.87641.1232
AQI 0.8431.02330.75630.95740.70750.82810.44681.0021.01081.2475
SGI 1.43851.4761.08711.08771.18680.5711.2731.53211.10530.9916
DEPI 1.03761.20980.86290.90820.92470.97691.08151.06241.0170.9004
SGAI 0.75890.78630.9630.96890.80560.75490.72930.70191.1061.0952
LVGI 0.93220.87840.93451.20530.84221.16141.02931.04880.91010.9919
TATA -0.0591-0.0738-0.0376-0.0045-0.1261-0.1074-0.0751-0.0465-0.0719-0.0683
M-score -2.48-2.01-2.67-1.88-3.25-1.49-3.06-2.01-2.91-2.61

Valero Energy Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.15021.18170.82680.820.81260.84570.99361.10161.24061.0674
GMI 0.69191.01011.0330.87011.07080.75950.66310.82260.90351.1122
AQI 0.7881.0020.93660.96020.98651.01081.0741.15431.17851.2475
SGI 1.50521.53211.49751.37151.22691.10531.02010.99070.99360.9916
DEPI 0.99261.06241.04491.05841.03411.0171.00570.94580.9250.9004
SGAI -23.68270.70190.71632.18252.36852.88542.971.06081.04761.0096
LVGI 1.051.04881.01220.97460.96470.91010.91930.98841.00740.9919
TATA -0.0779-0.0465-0.0468-0.0556-0.0811-0.0719-0.0467-0.0561-0.0209-0.0683
M-score 1.72-2.01-2.37-2.85-3.02-3.28-3.15-2.70-2.36-2.60
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