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Valero Energy Corp (NYSE:VLO)
Beneish M-Score
-2.80 (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 -2.80 suggests that the company is not a manipulator.

VLO' s Beneish M-Score Range Over the Past 10 Years
Min: -90.16   Max: 2.19
Current: -2.8

-90.16
2.19

During the past 13 years, the highest Beneish M-Score of Valero Energy Corp was 2.19. The lowest was -90.16. And the median was -2.43.


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 * 1.1908+0.528 * 0.8872+0.404 * 1.184+0.892 * 0.7051+0.115 * 0.8929
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3808+4.679 * -0.0409-0.327 * 0.9389
=-2.80

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $4,880 Mil.
Revenue was 19584 + 15714 + 18777 + 22579 = $76,654 Mil.
Gross Profit was 1917 + 1470 + 1346 + 2800 = $7,533 Mil.
Total Current Assets was $16,180 Mil.
Total Assets was $45,452 Mil.
Property, Plant and Equipment(Net PPE) was $26,589 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,932 Mil.
Selling, General & Admin. Expense(SGA) was $700 Mil.
Total Current Liabilities was $8,652 Mil.
Long-Term Debt was $6,646 Mil.
Net Income was 814 + 495 + 298 + 1377 = $2,984 Mil.
Non Operating Income was 14 + 9 + 11 + 3 = $37 Mil.
Cash Flow from Operations was 2319 + 640 + 487 + 1362 = $4,808 Mil.
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.



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)
=(4880 / 76654) / (5812 / 108715)
=0.06366269 / 0.05346088
=1.1908

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)
=(9479 / 108715) / (7533 / 76654)
=0.08719128 / 0.09827276
=0.8872

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 - (16180 + 26589) / 45452) / (1 - (18492 + 26734) / 47599)
=0.05902931 / 0.04985399
=1.184

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
=76654 / 108715
=0.7051

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))
=(1721 / (1721 + 26734)) / (1932 / (1932 + 26589))
=0.06048146 / 0.06773956
=0.8929

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)
=(700 / 76654) / (719 / 108715)
=0.00913194 / 0.00661362
=1.3808

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)
=((6646 + 8652) / 45452) / ((7199 + 9865) / 47599)
=0.33657485 / 0.35849493
=0.9389

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
=(2984 - 37 - 4808) / 45452
=-0.0409

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 -2.80 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.13151.61290.31722.28610.95271.18460.88221.06140.67651.1084
GMI 0.78811.14271.58011.85230.7471.01010.86141.14370.73330.6263
AQI 0.75630.95740.70750.82810.44681.0021.01081.24751.00341.2452
SGI 1.08711.08771.18680.5711.2731.53211.09850.99770.94760.6711
DEPI 0.86290.90820.92470.97691.08151.06241.0170.90041.05480.9214
SGAI 0.9630.96890.80560.75490.72930.70191.11281.08851.00791.4614
LVGI 0.93451.20530.84221.16141.02931.04880.91010.99190.84360.9523
TATA -0.0374-0.0045-0.1261-0.1074-0.0751-0.0465-0.0719-0.0683-0.0144-0.0376
M-score -2.65-1.87-3.27-1.81-2.94-2.00-2.89-2.59-2.98-3.02

Valero Energy Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.00481.0510.90490.67650.7460.92460.80731.10841.3091.1908
GMI 1.39611.12960.81530.73360.67860.57110.56830.62630.70770.8872
AQI 1.17281.13381.08631.00341.05380.96021.04381.24521.16331.184
SGI 1.01141.02260.99950.94760.85710.78130.70510.67110.69350.7051
DEPI 0.92850.98171.01991.05481.03081.02140.97050.92140.91710.8929
SGAI 0.40020.86010.89761.00791.11791.35531.4781.46141.45821.3808
LVGI 0.94680.94020.92250.84360.86920.92060.8540.95230.91120.9389
TATA -0.0372-0.0319-0.0493-0.0144-0.0376-0.0451-0.0288-0.0376-0.03-0.0409
M-score -2.25-2.40-2.82-2.97-3.14-3.23-3.30-3.02-2.76-2.80
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