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Halliburton Co (NYSE:HAL)
Beneish M-Score
-2.58 (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 -2.58 suggests that the company is not a manipulator.

HAL' s 10-Year Beneish M-Score Range
Min: -3.55   Max: 1.13
Current: -2.58

-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 * 1.0437+0.528 * 0.9221+0.404 * 1.0092+0.892 * 1.0925+0.115 * 0.9803
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9741+4.679 * -0.0434-0.327 * 0.9642
=-2.58

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $7,555 Mil.
Revenue was 8701 + 8051 + 7348 + 7639 = $31,739 Mil.
Gross Profit was 1513 + 1283 + 1045 + 1238 = $5,079 Mil.
Total Current Assets was $14,847 Mil.
Total Assets was $31,583 Mil.
Property, Plant and Equipment(Net PPE) was $12,050 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,066 Mil.
Selling, General & Admin. Expense(SGA) was $332 Mil.
Total Current Liabilities was $5,889 Mil.
Long-Term Debt was $7,816 Mil.
Net Income was 1203 + 774 + 622 + 793 = $3,392 Mil.
Non Operating Income was 12 + -24 + -31 + -6 = $-49 Mil.
Cash Flow from Operations was 838 + 1121 + 954 + 1898 = $4,811 Mil.
Accounts Receivable was $6,626 Mil.
Revenue was 7472 + 7317 + 6974 + 7290 = $29,053 Mil.
Gross Profit was 1188 + 1071 + 974 + 1054 = $4,287 Mil.
Total Current Assets was $12,890 Mil.
Total Assets was $27,948 Mil.
Property, Plant and Equipment(Net PPE) was $10,949 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,834 Mil.
Selling, General & Admin. Expense(SGA) was $312 Mil.
Total Current Liabilities was $4,762 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)
=(7555 / 31739) / (6626 / 29053)
=0.23803522 / 0.22806595
=1.0437

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)
=(1283 / 29053) / (1513 / 31739)
=0.14755791 / 0.16002395
=0.9221

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 - (14847 + 12050) / 31583) / (1 - (12890 + 10949) / 27948)
=0.14837096 / 0.14702304
=1.0092

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
=31739 / 29053
=1.0925

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))
=(1834 / (1834 + 10949)) / (2066 / (2066 + 12050))
=0.1434718 / 0.14635874
=0.9803

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)
=(332 / 31739) / (312 / 29053)
=0.01046032 / 0.01073899
=0.9741

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 + 5889) / 31583) / ((7816 + 4762) / 27948)
=0.43393598 / 0.45005009
=0.9642

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
=(3392 - -49 - 4811) / 31583
=-0.0434

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 -2.58 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.80823.28990.42690.99851.02460.97281.0810.93790.99161.0354
GMI 1.08280.2440.85671.11211.05851.54640.83060.89141.21681.0922
AQI 0.63430.96840.92180.79661.0360.84961.08461.08530.97370.9679
SGI 1.22210.50791.28271.17821.19750.80281.22471.38151.1481.0315
DEPI 1.02371.14880.91551.14211.0350.96070.99011.01891.00710.9532
SGAI 0.89521.60330.90690.72710.80370.91430.90330.88820.85251.1739
LVGI 1.050.71170.92670.86030.97271.0880.88611.04990.92481.2584
TATA -0.11980.1051-0.08050.0595-0.029-0.0746-0.0175-0.0346-0.0358-0.078
M-score -3.12-0.72-3.21-1.96-2.32-2.82-2.29-2.38-2.37-2.87

Halliburton Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.96850.99790.99161.12511.08251.09861.03540.97691.00281.0437
GMI 0.95391.08721.21681.38611.39891.24071.09220.98920.92160.9221
AQI 1.02771.0730.97370.95521.02661.00010.96791.01311.03241.0092
SGI 1.31711.23351.1481.08311.03531.02741.03151.04081.06341.0925
DEPI 1.01131.00031.00710.99540.98160.97020.95320.94840.95650.9803
SGAI 0.82370.79020.85250.92331.02781.12891.17391.15711.06310.974
LVGI 1.03391.01470.92480.92580.96661.25731.25841.27171.23570.9642
TATA -0.0171-0.0122-0.0358-0.0445-0.0749-0.0803-0.078-0.0761-0.0683-0.0434
M-score -2.30-2.22-2.37-2.28-2.50-2.72-2.87-2.94-2.86-2.58
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