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Halliburton Co (NYSE:HAL)
Beneish M-Score
-3.10 (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 -3.10 suggests that the company is not a manipulator.

HAL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.2   Max: 0.1
Current: -3.1

-3.2
0.1

During the past 13 years, the highest Beneish M-Score of Halliburton Co was 0.10. The lowest was -3.20. 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 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 * 0.9777+0.528 * 1.5236+0.404 * 0.7635+0.892 * 0.719+0.115 * 1.0114
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1336+4.679 * -0.0881-0.327 * 1.2805
=-3.10

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $5,317 Mil.
Revenue was 5082 + 5582 + 5919 + 7050 = $23,633 Mil.
Gross Profit was 526 + 543 + 686 + 765 = $2,520 Mil.
Total Current Assets was $21,609 Mil.
Total Assets was $36,942 Mil.
Property, Plant and Equipment(Net PPE) was $10,911 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,835 Mil.
Selling, General & Admin. Expense(SGA) was $238 Mil.
Total Current Liabilities was $5,359 Mil.
Long-Term Debt was $14,687 Mil.
Net Income was -28 + -54 + 54 + -643 = $-671 Mil.
Non Operating Income was -43 + -34 + -23 + -224 = $-324 Mil.
Cash Flow from Operations was 885 + 26 + 1183 + 812 = $2,906 Mil.
Accounts Receivable was $7,564 Mil.
Revenue was 8770 + 8701 + 8051 + 7348 = $32,870 Mil.
Gross Profit was 1304 + 1708 + 1283 + 1045 = $5,340 Mil.
Total Current Assets was $14,647 Mil.
Total Assets was $32,165 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 $292 Mil.
Total Current Liabilities was $5,866 Mil.
Long-Term Debt was $7,765 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)
=(5317 / 23633) / (7564 / 32870)
=0.22498202 / 0.23011865
=0.9777

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)
=(543 / 32870) / (526 / 23633)
=0.16245817 / 0.10663056
=1.5236

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 - (21609 + 10911) / 36942) / (1 - (14647 + 12475) / 32165)
=0.11970115 / 0.15678533
=0.7635

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
=23633 / 32870
=0.719

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))
=(2126 / (2126 + 12475)) / (1835 / (1835 + 10911))
=0.14560647 / 0.14396673
=1.0114

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)
=(238 / 23633) / (292 / 32870)
=0.01007066 / 0.00888348
=1.1336

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)
=((14687 + 5359) / 36942) / ((7765 + 5866) / 32165)
=0.5426344 / 0.42378362
=1.2805

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
=(-671 - -324 - 2906) / 36942
=-0.0881

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 -3.10 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.42690.99851.02460.97281.0810.93790.99161.03541.09460.9777
GMI 0.85671.11211.05851.54640.83060.89141.21681.09220.9361.5236
AQI 0.92180.79661.0360.84961.08461.08530.97370.96791.09170.7635
SGI 1.28271.17821.19750.80281.22471.38151.1481.03151.1180.719
DEPI 0.91551.14211.0350.96070.99011.01891.00710.95320.98691.0114
SGAI 0.90690.72710.80370.91430.90330.88820.85251.17390.78440.9526
LVGI 0.92670.86030.97271.0880.88611.04990.92481.25840.96441.2805
TATA -0.0770.0595-0.029-0.0746-0.0175-0.0346-0.0358-0.078-0.0174-0.0881
M-score -3.19-1.96-2.32-2.82-2.29-2.38-2.37-2.87-2.32-3.06

Halliburton Co Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.09861.03540.97691.00281.04371.09460.92940.83260.89050.9777
GMI 1.24071.09220.98920.92160.8880.9360.98191.06281.37661.5236
AQI 1.00010.96791.01311.03241.00921.09170.99110.90740.96060.7635
SGI 1.02741.03151.04081.06341.09251.1181.09390.99770.86080.719
DEPI 0.97020.95320.94840.95650.98030.98690.97220.92460.95671.0114
SGAI 1.12891.17391.15711.06310.9740.78440.87610.81840.83631.1336
LVGI 1.25731.25841.27171.23570.96420.96440.96480.97020.98631.2805
TATA -0.0803-0.078-0.0761-0.0683-0.0434-0.0174-0.0487-0.0743-0.0883-0.0881
M-score -2.72-2.87-2.94-2.86-2.60-2.32-2.67-2.96-2.91-3.10
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