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Halliburton Co (NYSE:HAL)
Beneish M-Score
-2.94 (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 -2.94 suggests that the company is not a manipulator.

HAL' s Beneish M-Score Range Over the Past 10 Years
Min: -3.54   Max: 1.11
Current: -2.94

-3.54
1.11

During the past 13 years, the highest Beneish M-Score of Halliburton Co was 1.11. The lowest was -3.54. And the median was -2.41.


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 * 1.2168+0.528 * 1.5934+0.404 * 1.126+0.892 * 0.638+0.115 * 1.0083
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9914+4.679 * -0.1242-0.327 * 1.3753
=-2.94

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $4,983 Mil.
Revenue was 4198 + 5082 + 5582 + 5919 = $20,781 Mil.
Gross Profit was 271 + 526 + 543 + 686 = $2,026 Mil.
Total Current Assets was $19,105 Mil.
Total Assets was $33,932 Mil.
Property, Plant and Equipment(Net PPE) was $9,252 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,621 Mil.
Selling, General & Admin. Expense(SGA) was $179 Mil.
Total Current Liabilities was $7,412 Mil.
Long-Term Debt was $12,207 Mil.
Net Income was -2412 + -28 + -54 + 54 = $-2,440 Mil.
Non Operating Income was -47 + -43 + -34 + -23 = $-147 Mil.
Cash Flow from Operations was -171 + 885 + 26 + 1183 = $1,923 Mil.
Accounts Receivable was $6,419 Mil.
Revenue was 7050 + 8770 + 8701 + 8051 = $32,572 Mil.
Gross Profit was 765 + 1304 + 1708 + 1283 = $5,060 Mil.
Total Current Assets was $13,825 Mil.
Total Assets was $30,587 Mil.
Property, Plant and Equipment(Net PPE) was $12,299 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,176 Mil.
Selling, General & Admin. Expense(SGA) was $283 Mil.
Total Current Liabilities was $5,018 Mil.
Long-Term Debt was $7,841 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)
=(4983 / 20781) / (6419 / 32572)
=0.23978634 / 0.1970711
=1.2168

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)
=(5060 / 32572) / (2026 / 20781)
=0.15534815 / 0.0974929
=1.5934

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 - (19105 + 9252) / 33932) / (1 - (13825 + 12299) / 30587)
=0.16429919 / 0.14591166
=1.126

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
=20781 / 32572
=0.638

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))
=(2176 / (2176 + 12299)) / (1621 / (1621 + 9252))
=0.15032815 / 0.14908489
=1.0083

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)
=(179 / 20781) / (283 / 32572)
=0.00861364 / 0.00868844
=0.9914

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)
=((12207 + 7412) / 33932) / ((7841 + 5018) / 30587)
=0.57818578 / 0.42040736
=1.3753

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
=(-2440 - -147 - 1923) / 33932
=-0.1242

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 -2.94 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 0.51121.73451.02460.97281.0810.93790.99161.03541.09460.9777
GMI 0.8070.6891.05851.54640.83320.88871.29921.0230.95921.4868
AQI 0.92180.79661.0360.84961.08461.08530.97370.96791.09170.7635
SGI 1.07130.67831.19750.80281.22471.38151.1481.03151.1180.719
DEPI 0.93571.23491.0350.96070.99011.01891.00710.95320.98691.0114
SGAI 1.10540.95990.80370.91430.90330.88820.85251.17390.830.9002
LVGI 0.92670.86030.97271.0880.88611.04990.92481.25840.96441.2805
TATA -0.07630.0595-0.0285-0.0746-0.0175-0.0346-0.0358-0.078-0.0174-0.0881
M-score -3.36-1.98-2.32-2.82-2.29-2.38-2.33-2.90-2.31-3.08

Halliburton Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.97691.00281.04371.09460.92940.83260.89050.97771.21681.3656
GMI 0.98920.92160.8880.9360.98191.06281.37661.52361.59341.875
AQI 1.01311.03241.00921.09170.99110.90740.96060.76351.1261.6167
SGI 1.04081.06341.09251.1181.09390.99770.86080.7190.6380.6142
DEPI 0.94840.95650.98030.98690.97220.92460.95671.01141.00831.0715
SGAI 1.15711.06310.9740.78440.770.70280.69980.94790.99141.3464
LVGI 1.27171.23570.96420.96440.96480.97020.98631.28051.37531.4293
TATA -0.0761-0.0683-0.0434-0.0174-0.0487-0.0743-0.0883-0.0881-0.1242-0.0957
M-score -2.94-2.86-2.60-2.32-2.65-2.94-2.88-3.06-2.94-2.42
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