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Halliburton Co (NYSE:HAL)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

HAL' s 10-Year Beneish M-Score Range
Min: -3.55   Max: 1.13
Current: -2.67

-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 * 0.9294+0.528 * 1.0076+0.404 * 0.9911+0.892 * 1.0939+0.115 * 0.9722
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9223+4.679 * -0.0487-0.327 * 0.9648
=-2.67

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $6,419 Mil.
Revenue was 7050 + 8770 + 8701 + 8051 = $32,572 Mil.
Gross Profit was 765 + 1370 + 1513 + 1283 = $4,931 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 $339 Mil.
Total Current Liabilities was $5,018 Mil.
Long-Term Debt was $7,841 Mil.
Net Income was -643 + 901 + 1203 + 774 = $2,235 Mil.
Non Operating Income was -224 + 41 + 12 + -24 = $-195 Mil.
Cash Flow from Operations was 812 + 1149 + 838 + 1121 = $3,920 Mil.
Accounts Receivable was $6,314 Mil.
Revenue was 7348 + 7639 + 7472 + 7317 = $29,776 Mil.
Gross Profit was 1045 + 1238 + 1188 + 1071 = $4,542 Mil.
Total Current Assets was $13,486 Mil.
Total Assets was $29,256 Mil.
Property, Plant and Equipment(Net PPE) was $11,463 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,962 Mil.
Selling, General & Admin. Expense(SGA) was $336 Mil.
Total Current Liabilities was $4,932 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)
=(6419 / 32572) / (6314 / 29776)
=0.1970711 / 0.21204997
=0.9294

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)
=(1370 / 29776) / (765 / 32572)
=0.15253896 / 0.15138769
=1.0076

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 - (13825 + 12299) / 30587) / (1 - (13486 + 11463) / 29256)
=0.14591166 / 0.14721766
=0.9911

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
=32572 / 29776
=1.0939

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))
=(1962 / (1962 + 11463)) / (2176 / (2176 + 12299))
=0.14614525 / 0.15032815
=0.9722

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)
=(339 / 32572) / (336 / 29776)
=0.01040771 / 0.01128426
=0.9223

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)
=((7841 + 5018) / 30587) / ((7816 + 4932) / 29256)
=0.42040736 / 0.43573968
=0.9648

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
=(2235 - -195 - 3920) / 30587
=-0.0487

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 -2.67 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 0.2440.85671.11211.05851.54640.83320.88871.21681.09220.9592
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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.99161.12511.08251.09861.03540.97691.00281.04371.09460.9294
GMI 1.21681.38611.39891.24071.09220.98920.92160.92210.95921.0076
AQI 0.97370.95521.02661.00010.96791.01311.03241.00921.01440.9911
SGI 1.1481.08311.03531.02741.03151.04081.06341.09251.1181.0939
DEPI 1.00710.99540.98160.97020.95320.94840.95650.98030.98690.9722
SGAI 0.85250.92331.02781.12891.17391.15711.06310.9740.830.9223
LVGI 0.92480.92580.96661.25731.25841.27171.23570.96420.96860.9648
TATA -0.0358-0.0445-0.0749-0.0803-0.078-0.0761-0.0683-0.0434-0.0174-0.0487
M-score -2.37-2.28-2.50-2.72-2.87-2.94-2.86-2.58-2.35-2.67
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