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Valero Energy Corp (NYSE:VLO)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

VLO' s 10-Year Beneish M-Score Range
Min: -90.19   Max: 2.16
Current: -2.67

-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 -2.44.


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 * 0.9105+0.528 * 0.932+0.404 * 1.0863+0.892 * 0.9933+0.115 * 1.0199
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.3784+4.679 * -0.0493-0.327 * 0.9225
=-2.67

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $8,254 Mil.
Revenue was 34408 + 34914 + 33663 + 34429 = $137,414 Mil.
Gross Profit was 2280 + 1669 + 1931 + 2178 = $8,058 Mil.
Total Current Assets was $19,666 Mil.
Total Assets was $48,455 Mil.
Property, Plant and Equipment(Net PPE) was $26,449 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,702 Mil.
Selling, General & Admin. Expense(SGA) was $689 Mil.
Total Current Liabilities was $13,460 Mil.
Long-Term Debt was $5,783 Mil.
Net Income was 1059 + 588 + 828 + 1288 = $3,763 Mil.
Non Operating Income was 11 + 12 + 15 + 342 = $380 Mil.
Cash Flow from Operations was 1866 + 1134 + 244 + 2529 = $5,773 Mil.
Accounts Receivable was $9,126 Mil.
Revenue was 36137 + 34034 + 33474 + 34695 = $138,340 Mil.
Gross Profit was 1150 + 2511 + 1667 + 2233 = $7,561 Mil.
Total Current Assets was $18,593 Mil.
Total Assets was $46,293 Mil.
Property, Plant and Equipment(Net PPE) was $25,642 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,685 Mil.
Selling, General & Admin. Expense(SGA) was $1,833 Mil.
Total Current Liabilities was $13,668 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)
=(8254 / 137414) / (9126 / 138340)
=0.06006666 / 0.06596791
=0.9105

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)
=(1669 / 138340) / (2280 / 137414)
=0.0546552 / 0.05864031
=0.932

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 - (19666 + 26449) / 48455) / (1 - (18593 + 25642) / 46293)
=0.04829223 / 0.04445597
=1.0863

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
=137414 / 138340
=0.9933

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))
=(1685 / (1685 + 25642)) / (1702 / (1702 + 26449))
=0.06166063 / 0.06045966
=1.0199

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)
=(689 / 137414) / (1833 / 138340)
=0.00501405 / 0.01324996
=0.3784

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)
=((5783 + 13460) / 48455) / ((6261 + 13668) / 46293)
=0.39713136 / 0.43049705
=0.9225

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
=(3763 - 380 - 5773) / 48455
=-0.0493

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 -2.67 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 0.96291.3131.13151.61290.31722.16381.00661.23990.83191.0898
GMI 0.83750.93830.78811.14271.58011.52150.90931.01010.87641.1232
AQI 0.8431.02330.75630.95740.70750.46150.80171.0021.01081.2475
SGI 1.43851.4761.08711.08771.18680.60231.20681.53211.10530.9916
DEPI 1.03761.20980.86290.90820.92471.03591.01991.06241.0170.9004
SGAI 0.75890.78630.9630.96890.80561.59390.34540.70191.1061.0952
LVGI 0.93220.87840.93451.20530.84221.15871.03171.04880.91010.9919
TATA -0.0591-0.0738-0.0376-0.0045-0.1261-0.1073-0.0751-0.0465-0.0719-0.0683
M-score -2.48-2.04-2.66-1.87-3.27-2.36-2.66-1.95-2.92-2.58

Valero Energy Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.78260.78340.83191.0121.14071.23271.08981.01111.05760.9105
GMI 0.96931.19640.87640.75560.69390.75590.96381.04111.26740.932
AQI 0.96020.98651.01081.0741.15431.17851.24751.17281.13381.0863
SGI 1.40441.26661.10531.02010.99070.99360.99161.00511.01620.9933
DEPI 1.05841.03411.0171.00570.94580.9250.90040.92850.98171.0199
SGAI 1.98679.32771.1061.15042.96682.89152.6342.53210.36370.3784
LVGI 0.97460.96470.91010.91930.98841.00740.99190.94680.94020.9225
TATA -0.0594-0.0848-0.0719-0.0431-0.0525-0.0175-0.0683-0.0372-0.0319-0.0493
M-score -2.78-4.16-2.92-2.75-3.04-2.75-2.93-2.80-2.24-2.67
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