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Halliburton Co (NYSE:HAL)
Beneish M-Score
-2.95 (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 -2.95 suggests that the company is not a manipulator.

HAL' s 10-Year Beneish M-Score Range
Min: -3.55   Max: 1.13
Current: -2.95

-3.55
1.13

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.


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 * 0.8326+0.528 * 1.0944+0.404 * 0.9074+0.892 * 0.9977+0.115 * 0.9246
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8689+4.679 * -0.0743-0.327 * 0.9702
=-2.95

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $5,633 Mil.
Revenue was 5919 + 7050 + 8770 + 8701 = $30,440 Mil.
Gross Profit was 686 + 765 + 1370 + 1513 = $4,334 Mil.
Total Current Assets was $15,224 Mil.
Total Assets was $30,606 Mil.
Property, Plant and Equipment(Net PPE) was $11,153 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,108 Mil.
Selling, General & Admin. Expense(SGA) was $293 Mil.
Total Current Liabilities was $5,005 Mil.
Long-Term Debt was $7,838 Mil.
Net Income was 54 + -643 + 901 + 1203 = $1,515 Mil.
Non Operating Income was -23 + -224 + 41 + 12 = $-194 Mil.
Cash Flow from Operations was 1183 + 812 + 1149 + 838 = $3,982 Mil.
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.



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)
=(5633 / 30440) / (6781 / 30510)
=0.18505256 / 0.222255
=0.8326

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)
=(765 / 30510) / (686 / 30440)
=0.15581776 / 0.14237845
=1.0944

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 - (15224 + 11153) / 30606) / (1 - (14165 + 11677) / 30484)
=0.13817552 / 0.1522766
=0.9074

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
=30440 / 30510
=0.9977

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))
=(2012 / (2012 + 11677)) / (2108 / (2108 + 11153))
=0.14697933 / 0.15896237
=0.9246

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)
=(293 / 30440) / (338 / 30510)
=0.00962549 / 0.01107833
=0.8689

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)
=((7838 + 5005) / 30606) / ((7816 + 5369) / 30484)
=0.4196236 / 0.43252198
=0.9702

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
=(1515 - -194 - 3982) / 30606
=-0.0743

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 -2.95 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 0.2440.85671.11211.05851.54640.83320.88871.29921.0230.9592
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 -0.72-3.21-1.96-2.32-2.82-2.29-2.38-2.33-2.90-2.35

Halliburton Co Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.12511.08251.09861.03540.97691.00281.04371.09460.92940.8326
GMI 1.31091.32351.16881.0230.98920.92160.92210.95921.00761.0944
AQI 0.95521.02661.00010.96791.01311.03241.00921.01440.99110.9074
SGI 1.08311.03531.02741.03151.04081.06341.09251.1181.09390.9977
DEPI 0.99540.98160.97020.95320.94840.95650.98030.98690.97220.9246
SGAI 0.92331.02781.12891.17391.15711.06310.9740.830.92230.8689
LVGI 0.92580.96661.25731.25841.27171.23570.96420.96860.96480.9702
TATA -0.0445-0.0749-0.0803-0.078-0.0761-0.0683-0.0434-0.0174-0.0487-0.0743
M-score -2.32-2.54-2.76-2.90-2.94-2.86-2.58-2.35-2.67-2.95
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