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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.
During the past 13 years, the highest Beneish M-Score of Exxon Mobil Corp was -1.26. The lowest was -3.19. And the median was -2.60.
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 Exxon Mobil 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 * 1.1819||+||0.528 * 0.9346||+||0.404 * 1.0116||+||0.892 * 0.6697||+||0.115 * 0.9643|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.3953||+||4.679 * -0.0407||-||0.327 * 1.0385|
|This Year (Mar16) TTM:||Last Year (Mar15) TTM:|
|Accounts Receivable was $19,814 Mil.|
Revenue was 48707 + 59807 + 67344 + 74113 = $249,971 Mil.
Gross Profit was 15624 + 17712 + 20641 + 21601 = $75,578 Mil.
Total Current Assets was $44,251 Mil.
Total Assets was $342,789 Mil.
Property, Plant and Equipment(Net PPE) was $255,257 Mil.
Depreciation, Depletion and Amortization(DDA) was $18,513 Mil.
Selling, General & Admin. Expense(SGA) was $11,381 Mil.
Total Current Liabilities was $48,726 Mil.
Long-Term Debt was $29,568 Mil.
Net Income was 1810 + 2780 + 4240 + 4190 = $13,020 Mil.
Non Operating Income was 0 + -251 + 78 + 0 = $-173 Mil.
Cash Flow from Operations was 4812 + 4380 + 9174 + 8792 = $27,158 Mil.
|Accounts Receivable was $25,031 Mil.
Revenue was 67618 + 87276 + 107130 + 111208 = $373,232 Mil.
Gross Profit was 20660 + 24570 + 29592 + 30649 = $105,471 Mil.
Total Current Assets was $50,658 Mil.
Total Assets was $342,961 Mil.
Property, Plant and Equipment(Net PPE) was $249,497 Mil.
Depreciation, Depletion and Amortization(DDA) was $17,405 Mil.
Selling, General & Admin. Expense(SGA) was $12,179 Mil.
Total Current Liabilities was $55,933 Mil.
Long-Term Debt was $19,494 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(19814 / 249971)||/||(25031 / 373232)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(105471 / 373232)||/||(75578 / 249971)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (44251 + 255257) / 342789)||/||(1 - (50658 + 249497) / 342961)|
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.
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))|
|=||(17405 / (17405 + 249497))||/||(18513 / (18513 + 255257))|
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)|
|=||(11381 / 249971)||/||(12179 / 373232)|
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)|
|=||((29568 + 48726) / 342789)||/||((19494 + 55933) / 342961)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(13020 - -173||-||27158)||/||342789|
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.
Exxon Mobil Corp has a M-score of -2.91 suggests that the company will not be a manipulator.
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
Exxon Mobil Corp Annual Data
Exxon Mobil Corp Quarterly Data