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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.
Halliburton Co has a M-score of -2.86 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Halliburton Co was 1.13. The lowest was -3.55. And the median was -2.40.
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 * 1.0028||+||0.528 * 0.9216||+||0.404 * 1.0324||+||0.892 * 1.0634||+||0.115 * 0.9565|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0631||+||4.679 * -0.0683||-||0.327 * 1.2357|
* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $6,781 Mil.|
Revenue was 8051 + 7348 + 7639 + 7472 = $30,510 Mil.
Gross Profit was 1283 + 1045 + 1238 + 1188 = $4,754 Mil.
Total Current Assets was $14,165 Mil.
Total Assets was $30,484 Mil.
Property, Plant and Equipment(Net PPE) was $11,677 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,012 Mil.
Selling, General & Admin. Expense(SGA) was $338 Mil.
Total Current Liabilities was $5,369 Mil.
Long-Term Debt was $7,816 Mil.
Net Income was 774 + 622 + 793 + 706 = $2,895 Mil.
Non Operating Income was -24 + -31 + -6 + -12 = $-73 Mil.
Cash Flow from Operations was 1121 + 954 + 1898 + 1078 = $5,051 Mil.
|Accounts Receivable was $6,359 Mil.
Revenue was 7317 + 6974 + 7290 + 7111 = $28,692 Mil.
Gross Profit was 1071 + 974 + 1054 + 1021 = $4,120 Mil.
Total Current Assets was $12,621 Mil.
Total Assets was $27,418 Mil.
Property, Plant and Equipment(Net PPE) was $10,753 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,759 Mil.
Selling, General & Admin. Expense(SGA) was $299 Mil.
Total Current Liabilities was $4,777 Mil.
Long-Term Debt was $4,820 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)|
|=||(6781 / 30510)||/||(6359 / 28692)|
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)|
|=||(1045 / 28692)||/||(1283 / 30510)|
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 - (14165 + 11677) / 30484)||/||(1 - (12621 + 10753) / 27418)|
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))|
|=||(1759 / (1759 + 10753))||/||(2012 / (2012 + 11677))|
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)|
|=||(338 / 30510)||/||(299 / 28692)|
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 + 5369) / 30484)||/||((4820 + 4777) / 27418)|
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|
|=||(2895 - -73||-||5051)||/||30484|
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 -2.86 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
Halliburton Co Annual Data
Halliburton Co Quarterly Data