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Valero Energy Corp (NYSE:VLO)
Beneish M-Score
-3.14 (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 -3.14 suggests that the company is not a manipulator.

VLO' s 10-Year Beneish M-Score Range
Min: -90.19   Max: 2.16
Current: -3.14

-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 -2.41.


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 * 0.746+0.528 * 0.6786+0.404 * 1.0538+0.892 * 0.8571+0.115 * 1.0308
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1179+4.679 * -0.0376-0.327 * 0.8692
=-3.14

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $4,977 Mil.
Revenue was 21330 + 27859 + 34408 + 34914 = $118,511 Mil.
Gross Profit was 2083 + 2435 + 2280 + 1669 = $8,467 Mil.
Total Current Assets was $16,788 Mil.
Total Assets was $45,741 Mil.
Property, Plant and Equipment(Net PPE) was $26,596 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,710 Mil.
Selling, General & Admin. Expense(SGA) was $711 Mil.
Total Current Liabilities was $8,634 Mil.
Long-Term Debt was $7,224 Mil.
Net Income was 964 + 1155 + 1059 + 588 = $3,766 Mil.
Non Operating Income was 24 + 9 + 11 + 12 = $56 Mil.
Cash Flow from Operations was 1433 + 997 + 1866 + 1134 = $5,430 Mil.
Accounts Receivable was $7,783 Mil.
Revenue was 33663 + 34429 + 36137 + 34034 = $138,263 Mil.
Gross Profit was 1932 + 2178 + 1150 + 1443 = $6,703 Mil.
Total Current Assets was $19,030 Mil.
Total Assets was $47,099 Mil.
Property, Plant and Equipment(Net PPE) was $25,766 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,711 Mil.
Selling, General & Admin. Expense(SGA) was $742 Mil.
Total Current Liabilities was $12,926 Mil.
Long-Term Debt was $5,860 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)
=(4977 / 118511) / (7783 / 138263)
=0.0419961 / 0.05629127
=0.746

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)
=(2435 / 138263) / (2083 / 118511)
=0.04848007 / 0.07144484
=0.6786

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 - (16788 + 26596) / 45741) / (1 - (19030 + 25766) / 47099)
=0.05152926 / 0.048897
=1.0538

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
=118511 / 138263
=0.8571

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))
=(1711 / (1711 + 25766)) / (1710 / (1710 + 26596))
=0.06227026 / 0.06041122
=1.0308

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)
=(711 / 118511) / (742 / 138263)
=0.00599944 / 0.00536658
=1.1179

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)
=((7224 + 8634) / 45741) / ((5860 + 12926) / 47099)
=0.34669115 / 0.39886197
=0.8692

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
=(3766 - 56 - 5430) / 45741
=-0.0376

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 -3.14 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 1.3131.13151.61290.31722.28610.95271.18460.87681.06790.6765
GMI 0.93830.78811.14271.58011.85230.7471.01010.87641.12420.7333
AQI 1.02330.75630.95740.70750.82810.44681.0021.01081.24751.0034
SGI 1.4761.08711.08771.18680.5711.2731.53211.10530.99160.9476
DEPI 1.20980.86290.90820.92470.97691.08151.06241.0170.90041.0548
SGAI 0.78630.9630.96890.80560.75490.72930.70191.1061.09521.0079
LVGI 0.87840.93451.20530.84221.16141.02931.04880.91010.99190.8436
TATA -0.0738-0.0376-0.0045-0.1261-0.1074-0.0751-0.0465-0.0719-0.0683-0.0144
M-score -2.04-2.66-1.87-3.27-1.81-2.94-2.00-2.88-2.60-2.98

Valero Energy Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.87681.0121.14071.23271.06791.01111.05760.91050.67650.746
GMI 0.75950.66310.93861.05211.29671.37521.11060.80030.73360.6786
AQI 1.01081.0741.15431.17851.24751.17281.13381.08631.00341.0538
SGI 1.10531.02010.99070.99360.99161.00511.01620.99330.94760.8571
DEPI 1.0171.00570.94580.9250.90040.92850.98171.01991.05481.0308
SGAI 2.88542.970.44580.43890.41980.40270.86550.90321.00791.1179
LVGI 0.91010.91930.98841.00740.99190.94680.94020.92250.84360.8692
TATA -0.0719-0.0467-0.0561-0.0209-0.0683-0.0372-0.0319-0.0493-0.0144-0.0376
M-score -3.25-3.13-2.50-2.18-2.40-2.26-2.41-2.83-2.97-3.14
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