Northern Beneish M Score

NOG Stock  USD 33.32  1.21  3.77%   
This module uses fundamental data of Northern Oil to approximate the value of its Beneish M Score. Northern Oil M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Additionally, see Northern Oil Piotroski F Score and Northern Oil Altman Z Score analysis.
  
The current year Debt Current is expected to grow to about 84.5 M, whereas Total Debt is forecasted to decline to about 1 B. Northern Oil Inventory Turnover is projected to slightly decrease based on the last few years of reporting. The past year's Inventory Turnover was at 6.05. The current year Accounts Payable Turnover is expected to grow to 9.62, whereas Calculated Tax Rate is forecasted to decline to 157.68.
At this time, it appears that Northern Oil Gas is an unlikely manipulator. The earnings manipulation may begin if Northern Oil's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Northern Oil executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Northern Oil's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-10.07
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables0.81Focus
Asset Quality2.34Focus
Expense Coverage0.8Focus
Gross Margin Strengs1.13Focus
Accruals Factor0.8Focus
Depreciation Resistance1.28Focus
Net Sales Growth1.23Focus
Financial Leverage Condition0.96Focus

Northern Oil Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Northern Oil's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Selling General and Administrative Expense21.1 M21.3 M
Fairly Down
Up
Slightly volatile
Revenues455.1 M370.4 M
Fairly Up
Down
Slightly volatile
Trade and Non Trade Receivables81.2 M81.7 M
Slightly Down
Up
Slightly volatile
Property Plant and Equipment Net986.4 M845.5 M
Fairly Up
Up
Very volatile
Operating Income(1.5 B)(1.5 B)
Fairly Down
Down
Slightly volatile
Net Cash Flow from Operations244.8 M226.4 M
Significantly Up
Down
Slightly volatile
Liabilities Non Current967.5 MB
Significantly Down
Up
Slightly volatile
Current Liabilities128 M117.2 M
Significantly Up
Down
Slightly volatile
Total Liabilities1.2 B1.2 B
Notably Up
Down
Pretty Stable
Investments Non Current131 K127.7 K
Fairly Up
Down
Very volatile
Investments Current57.4 M59 M
Fairly Down
Up
Pretty Stable
Investments63.9 M59.1 M
Significantly Up
Up
Pretty Stable
Gross Margin60.3753.6
Moderately Up
Down
Slightly volatile
Depreciation Amortization and Accretion161.5 M186.4 M
Fairly Down
Up
Slightly volatile
Debt Non Current970 MB
Notably Down
Up
Slightly volatile
Debt Current84.5 M78.3 M
Significantly Up
Up
Slightly volatile
Total DebtB1.1 B
Significantly Down
Up
Slightly volatile
Assets Non CurrentB858.4 M
Fairly Up
Up
Very volatile
Current Assets262.4 M199.1 M
Significantly Up
Down
Slightly volatile
Total Assets998.8 M973.2 M
Fairly Up
Down
Slightly volatile

Northern Oil Gas Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Northern Oil's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Northern Oil in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Northern Oil's degree of accounting gimmicks and manipulations.

About Northern Oil Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Expenses

1.55 Billion

Northern Oil Operating Expenses is projected to increase significantly based on the last few years of reporting. The past year's Operating Expenses was at 1.43 Billion

Northern Oil Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Northern Oil. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201820192020202120222023 (projected)
Revenues347.98 M405.53 M389.93 M322.13 M370.45 M455.15 M
Total Assets2.11 B2.27 B2.2 B846.29 M973.24 M998.85 M
Current Assets187.4 M221.7 M207.08 M173.16 M199.13 M262.39 M
Assets Non Current479.5 M1.28 B1.77 B746.46 M858.43 M1 B
Total Liabilities1.41 B1.6 B1.64 B1.28 B1.15 B1.21 B
Current Liabilities101.06 M128.36 M120.35 M101.92 M117.21 M128.01 M
Total Debt1.01 B848.39 M1.14 B962.58 M1.11 B1.02 B
Debt Current18.68 M18.18 M11.3 M68.08 M78.29 M84.47 M
Debt Non Current990.82 M830.2 M1.13 B894.5 M1.03 B969.96 M
Operating Income34.87 M108.58 M(27.12 M)(1.29 B)(1.49 B)(1.53 B)
Gross Margin42.6856.2957.6546.653.660.37

About Northern Oil Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Northern Oil Gas's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Northern Oil using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Northern Oil Gas based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Northern Oil and Gas, Inc., an independent energy company, engages in the acquisition, exploration, exploitation, development, and production of crude oil and natural gas properties in the United States. As of December 31, 2021, it owned working interests in 7,436 gross producing wells and had proved reserves of 287,682 million barrels of oil equivalent. Northern Oil operates under Oil Gas EP classification in the United States and is traded on New York Stock Exchange. It employs 25 people.

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Is Northern Oil's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Northern Oil. If investors know Northern will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Northern Oil listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
51.103
Market Capitalization
2.8 B
Quarterly Revenue Growth
1.051
Return On Assets
0.2997
Return On Equity
2.9123
The market value of Northern Oil Gas is measured differently than its book value, which is the value of Northern that is recorded on the company's balance sheet. Investors also form their own opinion of Northern Oil's value that differs from its market value or its book value, called intrinsic value, which is Northern Oil's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Northern Oil's market value can be influenced by many factors that don't directly affect Northern Oil's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Northern Oil's value and its price as these two are different measures arrived at by different means. Investors typically determine Northern Oil value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Northern Oil's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.