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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.
During the past 13 years, the highest Beneish M-Score of Helmerich & Payne Inc was -2.01. The lowest was -4.21. And the median was -2.73.
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 Helmerich & Payne Inc 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 * 1.5033||+||0.528 * 1.0692||+||0.404 * 1.1277||+||0.892 * 0.5813||+||0.115 * 0.9607|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.9039||+||4.679 * -0.0895||-||0.327 * 0.9224|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Dec16) TTM:||Last Year (Dec15) TTM:|
|Accounts Receivable was $327 Mil.|
Revenue was 368.59 + 331.708 + 366.486 + 438.191 = $1,505 Mil.
Gross Profit was 120.911 + 117.304 + 180.34 + 216.58 = $635 Mil.
Total Current Assets was $1,445 Mil.
Total Assets was $6,678 Mil.
Property, Plant and Equipment(Net PPE) was $5,103 Mil.
Depreciation, Depletion and Amortization(DDA) was $590 Mil.
Selling, General & Admin. Expense(SGA) was $148 Mil.
Total Current Liabilities was $287 Mil.
Long-Term Debt was $492 Mil.
Net Income was -35.063 + -72.835 + -21.2 + 21.205 = $-108 Mil.
Non Operating Income was 0.387 + -27.88 + 0.534 + 0.653 = $-26 Mil.
Cash Flow from Operations was 70.668 + 138.187 + 122.893 + 184.321 = $516 Mil.
|Accounts Receivable was $374 Mil.
Revenue was 487.847 + 553.8 + 661.445 + 885.67 = $2,589 Mil.
Gross Profit was 211.203 + 227.526 + 310.805 + 418.571 = $1,168 Mil.
Total Current Assets was $1,477 Mil.
Total Assets was $7,130 Mil.
Property, Plant and Equipment(Net PPE) was $5,531 Mil.
Depreciation, Depletion and Amortization(DDA) was $612 Mil.
Selling, General & Admin. Expense(SGA) was $134 Mil.
Total Current Liabilities was $409 Mil.
Long-Term Debt was $493 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(326.771 / 1504.975)||/||(373.896 / 2588.762)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(1168.105 / 2588.762)||/||(635.135 / 1504.975)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1445.283 + 5102.679) / 6677.637)||/||(1 - (1476.676 + 5530.817) / 7130.274)|
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.
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))|
|=||(611.936 / (611.936 + 5530.817))||/||(590.305 / (590.305 + 5102.679))|
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)|
|=||(148.371 / 1504.975)||/||(134.05 / 2588.762)|
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)|
|=||((492.11 + 286.628) / 6677.637)||/||((492.668 + 408.79) / 7130.274)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-107.893 - -26.306||-||516.069)||/||6677.637|
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.
Helmerich & Payne Inc has a M-score of -2.86 suggests that the company will not be a manipulator.
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
Helmerich & Payne Inc Annual Data
Helmerich & Payne Inc Quarterly Data