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GuruFocus has detected 4 Warning Signs with Exxon Mobil Corp $XOM.
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Exxon Mobil Corp (NYSE:XOM)
Beneish M-Score
-2.57 (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.

Exxon Mobil Corp has a M-score of -2.57 suggests that the company is not a manipulator.

XOM' s Beneish M-Score Range Over the Past 10 Years
Min: -3.19   Max: -1.26
Current: -2.57

-3.19
-1.26

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 -2.68.


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 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 * 1.1449+0.528 * 0.9877+0.404 * 1.1029+0.892 * 0.9628+0.115 * 0.8435
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9861+4.679 * -0.0447-0.327 * 0.9985
=-2.57

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $21,842 Mil.
Revenue was 63287 + 61016 + 58677 + 57694 = $240,674 Mil.
Gross Profit was 25083 + 18733 + 17496 + 17053 = $78,365 Mil.
Total Current Assets was $43,131 Mil.
Total Assets was $344,209 Mil.
Property, Plant and Equipment(Net PPE) was $253,147 Mil.
Depreciation, Depletion and Amortization(DDA) was $22,062 Mil.
Selling, General & Admin. Expense(SGA) was $10,805 Mil.
Total Current Liabilities was $53,374 Mil.
Long-Term Debt was $25,124 Mil.
Net Income was 4010 + 1680 + 2650 + 1700 = $10,040 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 8173 + 7396 + 5355 + 4519 = $25,443 Mil.
Accounts Receivable was $19,814 Mil.
Revenue was 48707 + 59807 + 67344 + 74113 = $249,971 Mil.
Gross Profit was 20439 + 17712 + 20641 + 21601 = $80,393 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.



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)
=(21842 / 240674) / (19814 / 249971)
=0.09075347 / 0.07926519
=1.1449

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)
=(80393 / 249971) / (78365 / 240674)
=0.32160931 / 0.32560642
=0.9877

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 - (43131 + 253147) / 344209) / (1 - (44251 + 255257) / 342789)
=0.1392497 / 0.12626134
=1.1029

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
=240674 / 249971
=0.9628

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))
=(18513 / (18513 + 255257)) / (22062 / (22062 + 253147))
=0.06762246 / 0.08016453
=0.8435

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)
=(10805 / 240674) / (11381 / 249971)
=0.04489475 / 0.04552928
=0.9861

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)
=((25124 + 53374) / 344209) / ((29568 + 48726) / 342789)
=0.2280533 / 0.2284029
=0.9985

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
=(10040 - 0 - 25443) / 344209
=-0.0447

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 -2.57 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 local exchange's currency.

Exxon Mobil Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.14560.68021.72010.94650.73320.95451.0060.75891.09431.4398
GMI 1.01691.19251.29330.87960.99191.0471.08270.99860.93730.9195
AQI 1.07921.03711.1060.87040.90230.96810.99570.99381.00511.0709
SGI 1.07131.180.65061.23391.26930.98940.91060.940.65270.8409
DEPI 0.99160.99411.17321.14561.01761.03440.99321.02810.95730.7997
SGAI 0.97380.90341.42680.80760.80390.93611.0191.04081.39861.1167
LVGI 1.06840.90971.03080.97551.05990.82321.04990.96291.00541.0563
TATA -0.0793-0.0646-0.0407-0.0593-0.0171-0.0338-0.0356-0.0362-0.0421-0.0431
M-score -2.63-2.75-2.19-2.66-2.59-2.60-2.70-2.92-3.01-2.49

Exxon Mobil Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.75890.90070.99571.05171.09431.18191.21021.21261.43981.1449
GMI 0.99860.99180.97880.95410.93730.87870.88330.9130.91950.9877
AQI 0.99380.97331.02351.03751.00511.01161.0081.0431.07091.1029
SGI 0.940.85560.76260.68040.65270.66970.69480.75880.84090.9628
DEPI 1.02811.0060.98560.9690.95730.96430.93640.94580.79970.8435
SGAI 1.04081.10421.21381.33521.39861.39531.36081.24151.11670.9861
LVGI 0.96290.9440.98480.99671.00541.03851.05871.06121.05630.9985
TATA -0.0362-0.0281-0.0368-0.0394-0.0421-0.0412-0.0361-0.0298-0.0431-0.0447
M-score -2.92-2.85-2.90-2.97-3.01-2.94-2.87-2.74-2.49-2.57
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