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Valero Energy Corp (NYSE:VLO)
Beneish M-Score
-2.42 (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 -2.42 suggests that the company is not a manipulator.

VLO' s 10-Year Beneish M-Score Range
Min: -90.93   Max: 2.16
Current: -2.42

-90.93
2.16

During the past 13 years, the highest Beneish M-Score of Valero Energy Corp was 2.16. The lowest was -90.93. And the median was -2.44.


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 * 1.0497+0.528 * 1.1108+0.404 * 1.1338+0.892 * 1.0162+0.115 * 0.9817
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8655+4.679 * -0.0319-0.327 * 0.9402
=-2.42

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $8,045 Mil.
Revenue was 34914 + 33663 + 34429 + 36137 = $139,143 Mil.
Gross Profit was 1669 + 1931 + 2178 + 1150 = $6,928 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.
Net Income was 588 + 828 + 1288 + 312 = $3,016 Mil.
Non Operating Income was 12 + 15 + 342 + 17 = $386 Mil.
Cash Flow from Operations was 1134 + 244 + 2529 + 221 = $4,128 Mil.
Accounts Receivable was $7,542 Mil.
Revenue was 34034 + 33474 + 34695 + 34726 = $136,929 Mil.
Gross Profit was 1443 + 1667 + 2233 + 2230 = $7,573 Mil.
Total Current Assets was $16,768 Mil.
Total Assets was $44,177 Mil.
Property, Plant and Equipment(Net PPE) was $25,386 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,639 Mil.
Selling, General & Admin. Expense(SGA) was $772 Mil.
Total Current Liabilities was $12,035 Mil.
Long-Term Debt was $6,261 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)
=(8045 / 139143) / (7542 / 136929)
=0.05781822 / 0.05507964
=1.0497

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)
=(1931 / 136929) / (1669 / 139143)
=0.05530603 / 0.0497905
=1.1108

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 - (18450 + 26122) / 47013) / (1 - (16768 + 25386) / 44177)
=0.05192181 / 0.04579306
=1.1338

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
=139143 / 136929
=1.0162

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))
=(1639 / (1639 + 25386)) / (1720 / (1720 + 26122))
=0.06064755 / 0.06177717
=0.9817

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)
=(679 / 139143) / (772 / 136929)
=0.00487987 / 0.00563796
=0.8655

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)
=((5784 + 12523) / 47013) / ((6261 + 12035) / 44177)
=0.38940293 / 0.41415216
=0.9402

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
=(3016 - 386 - 4128) / 47013
=-0.0319

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 -2.42 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 0.96271.28851.10981.67590.3222.63330.87581.18170.84571.0674
GMI 0.83770.9310.81.13461.6941.41930.90931.01010.87641.1232
AQI 0.84271.02580.77480.93260.350.93290.80171.0021.01081.2475
SGI 1.43851.50431.11771.03811.24950.57211.20681.53211.10530.9916
DEPI 1.0371.21050.90.87080.9970.96071.01991.06241.0170.9004
SGAI 0.75850.7541.01990.95440.76511.67820.34540.70191.1061.0952
LVGI 0.93210.87530.93771.20530.84221.15871.03171.04880.91010.9919
TATA -0.059-0.0704-0.033-0.0045-0.0137-0.1073-0.0751-0.0465-0.0719-0.0683
M-score -2.48-2.01-2.62-1.88-2.75-1.84-2.78-2.01-2.91-2.61

Valero Energy Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.81620.80080.78710.84570.99361.10161.24061.06741.01271.0497
GMI 1.00720.96931.19640.87640.75560.79170.88021.12371.2071.1108
AQI 0.93660.96020.98651.01081.0741.15431.17851.24751.17281.1338
SGI 1.51691.40441.26661.10531.02010.99070.99360.99161.00511.0162
DEPI 1.04491.05841.03411.0171.00570.94580.9250.90040.92850.9817
SGAI 1.02011.98679.32771.1061.15041.24681.21151.09521.03970.8655
LVGI 1.01220.97460.96470.91010.91930.98841.00740.99190.94680.9402
TATA -0.0506-0.0594-0.0848-0.0719-0.0431-0.0525-0.0175-0.0683-0.0372-0.0319
M-score -2.45-2.77-4.15-2.91-2.77-2.73-2.38-2.60-2.46-2.42
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