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Halliburton Co (NYSE:HAL)
Beneish M-Score
-2.35 (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 Co has a M-score of -2.35 suggests that the company is not a manipulator.

HAL' s 10-Year Beneish M-Score Range
Min: -3.22   Max: 0.02
Current: -2.35

-3.22
0.02

During the past 13 years, the highest Beneish M-Score of Halliburton Co was 0.02. The lowest was -3.22. And the median was -2.37.


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 Co 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 * 1.0946+0.528 * 0.9592+0.404 * 1.0144+0.892 * 1.118+0.115 * 0.9869
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.83+4.679 * -0.0174-0.327 * 0.9686
=-2.35

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $7,564 Mil.
Revenue was 8770 + 8701 + 8051 + 7348 = $32,870 Mil.
Gross Profit was 1370 + 1513 + 1283 + 1045 = $5,211 Mil.
Total Current Assets was $15,068 Mil.
Total Assets was $32,240 Mil.
Property, Plant and Equipment(Net PPE) was $12,475 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,126 Mil.
Selling, General & Admin. Expense(SGA) was $309 Mil.
Total Current Liabilities was $5,883 Mil.
Long-Term Debt was $7,840 Mil.
Net Income was 901 + 1203 + 774 + 622 = $3,500 Mil.
Non Operating Income was 41 + 12 + -24 + -31 = $-2 Mil.
Cash Flow from Operations was 1149 + 838 + 1121 + 954 = $4,062 Mil.
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.



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)
=(7564 / 32870) / (6181 / 29402)
=0.23011865 / 0.21022379
=1.0946

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)
=(1513 / 29402) / (1370 / 32870)
=0.15206449 / 0.15853362
=0.9592

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 - (15068 + 12475) / 32240) / (1 - (13704 + 11322) / 29223)
=0.14568859 / 0.14361975
=1.0144

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
=32870 / 29402
=1.118

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))
=(1900 / (1900 + 11322)) / (2126 / (2126 + 12475))
=0.14369989 / 0.14560647
=0.9869

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)
=(309 / 32870) / (333 / 29402)
=0.00940067 / 0.01132576
=0.83

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)
=((7840 + 5883) / 32240) / ((7816 + 5026) / 29223)
=0.42565136 / 0.43944838
=0.9686

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
=(3500 - -2 - 4062) / 32240
=-0.0174

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 Co has a M-score of -2.35 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 Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 3.28990.42690.99851.02460.97281.0810.93790.99161.03541.0946
GMI 0.2440.85671.11211.05851.54640.83060.89141.21681.09220.9592
AQI 0.96840.92180.79661.0360.84961.08461.08530.97370.96791.0144
SGI 0.50791.28271.17821.19750.80281.22471.38151.1481.03151.118
DEPI 1.14880.91551.14211.0350.96070.99011.01891.00710.95320.9869
SGAI 1.60330.90690.72710.80370.91430.90330.88820.85251.17390.83
LVGI 0.71170.92670.86030.97271.0880.88611.04990.92481.25840.9686
TATA 0.1051-0.08050.0595-0.029-0.0746-0.0175-0.0346-0.0358-0.078-0.0174
M-score -0.72-3.21-1.96-2.32-2.82-2.29-2.38-2.37-2.87-2.35

Halliburton Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.99790.99161.12511.08251.09861.03540.97691.00281.04371.0946
GMI 1.08721.21681.38611.39891.24071.09220.98920.92160.92210.9592
AQI 1.0730.97370.95521.02661.00010.96791.01311.03241.00921.0144
SGI 1.23351.1481.08311.03531.02741.03151.04081.06341.09251.118
DEPI 1.00031.00710.99540.98160.97020.95320.94840.95650.98030.9869
SGAI 0.79020.85250.92331.02781.12891.17391.15711.06310.9740.83
LVGI 1.01470.92480.92580.96661.25731.25841.27171.23570.96420.9686
TATA -0.0122-0.0358-0.0445-0.0749-0.0803-0.078-0.0761-0.0683-0.0434-0.0174
M-score -2.22-2.37-2.28-2.50-2.72-2.87-2.94-2.86-2.58-2.35
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