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Halliburton Company (NYSE:HAL)
Beneish M-Score
-2.87 (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.

Halliburton Company has a M-score of -2.87 suggests that the company is not a manipulator.

HAL' s 10-Year Beneish M-Score Range
Min: -3.22   Max: -0.03
Current: -2.87

-3.22
-0.03

During the past 13 years, the highest Beneish M-Score of Halliburton Company was -0.03. The lowest was -3.22. And the median was -2.38.


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 Halliburton Company 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 * 1.0354+0.528 * 1.0922+0.404 * 0.9679+0.892 * 1.0315+0.115 * 0.9532
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1739+4.679 * -0.078-0.327 * 1.2584
=-2.87

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $6,181 Mil.
Revenue was 7639 + 7472 + 7317 + 6974 = $29,402 Mil.
Gross Profit was 1238 + 1188 + 1071 + 974 = $4,471 Mil.
Total Current Assets was $13,704 Mil.
Total Assets was $29,223 Mil.
Property, Plant and Equipment(Net PPE) was $11,322 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,900 Mil.
Selling, General & Admin. Expense(SGA) was $333 Mil.
Total Current Liabilities was $5,026 Mil.
Long-Term Debt was $7,816 Mil.
Net Income was 793 + 706 + 644 + -18 = $2,125 Mil.
Non Operating Income was -6 + -12 + -11 + -14 = $-43 Mil.
Cash Flow from Operations was 1898 + 1078 + 1122 + 349 = $4,447 Mil.
Accounts Receivable was $5,787 Mil.
Revenue was 7290 + 7111 + 7234 + 6868 = $28,503 Mil.
Gross Profit was 1054 + 1021 + 1268 + 1391 = $4,734 Mil.
Total Current Assets was $13,086 Mil.
Total Assets was $27,410 Mil.
Property, Plant and Equipment(Net PPE) was $10,257 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,628 Mil.
Selling, General & Admin. Expense(SGA) was $275 Mil.
Total Current Liabilities was $4,752 Mil.
Long-Term Debt was $4,820 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)
=(6181 / 29402) / (5787 / 28503)
=0.21022379 / 0.20303126
=1.0354

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)
=(1188 / 28503) / (1238 / 29402)
=0.16608778 / 0.15206449
=1.0922

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 - (13704 + 11322) / 29223) / (1 - (13086 + 10257) / 27410)
=0.14361975 / 0.1483765
=0.9679

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
=29402 / 28503
=1.0315

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))
=(1628 / (1628 + 10257)) / (1900 / (1900 + 11322))
=0.13697939 / 0.14369989
=0.9532

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)
=(333 / 29402) / (275 / 28503)
=0.01132576 / 0.00964811
=1.1739

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)
=((7816 + 5026) / 29223) / ((4820 + 4752) / 27410)
=0.43944838 / 0.34921561
=1.2584

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
=(2125 - -43 - 4447) / 29223
=-0.078

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.

Halliburton Company has a M-score of -2.87 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.

Halliburton Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.98761.64350.42690.99851.02460.97281.0810.93790.99161.0354
GMI 1.08280.2440.85671.11211.05851.54640.83060.89141.21681.0922
AQI 0.63430.96840.92180.79661.0360.84961.08461.08530.97370.9679
SGI 1.22210.50791.28271.17821.19750.80281.22471.38151.1481.0315
DEPI 1.02371.14880.91551.14211.0350.96070.99011.01891.00710.9532
SGAI 0.89521.60330.90690.72710.80370.91430.90330.88820.85251.1739
LVGI 1.050.71170.92670.86030.97271.0880.88611.04990.92481.2584
TATA -0.11980.1051-0.08050.0595-0.029-0.0746-0.0175-0.0346-0.0358-0.078
M-score -2.95-2.24-3.21-1.96-2.32-2.82-2.29-2.38-2.37-2.87

Halliburton Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.92190.93790.9530.96850.99790.99161.07451.08251.09861.0354
GMI 0.81370.890.88660.95391.08721.21681.38611.39891.24071.0922
AQI 0.99891.08531.06451.02771.0730.97370.95521.02661.00010.9679
SGI 1.38951.38151.3551.31711.23351.1481.08311.03531.02741.0315
DEPI 1.01781.01891.01331.01131.00031.00710.99540.98160.97020.9532
SGAI 0.88280.88820.85440.82370.79020.85250.92331.02781.12891.1739
LVGI 0.8971.04991.04231.03391.01470.92480.92580.96661.25731.2584
TATA -0.0311-0.0346-0.0353-0.0171-0.0122-0.0358-0.0445-0.0749-0.0803-0.078
M-score -2.39-2.38-2.39-2.30-2.22-2.37-2.32-2.50-2.72-2.87
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