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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 -4.20. And the median was -2.70.
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 * 1.3918||+||0.528 * 1.0285||+||0.404 * 0.6831||+||0.892 * 0.5149||+||0.115 * 0.9306|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 2.2244||+||4.679 * -0.1279||-||0.327 * 0.9808|
|This Year (Jun16) TTM:||Last Year (Jun15) TTM:|
|Accounts Receivable was $351 Mil.|
Revenue was 366.486 + 438.191 + 487.847 + 557.539 = $1,850 Mil.
Gross Profit was 180.34 + 216.58 + 211.203 + 230.578 = $839 Mil.
Total Current Assets was $1,538 Mil.
Total Assets was $6,977 Mil.
Property, Plant and Equipment(Net PPE) was $5,306 Mil.
Depreciation, Depletion and Amortization(DDA) was $596 Mil.
Selling, General & Admin. Expense(SGA) was $150 Mil.
Total Current Liabilities was $327 Mil.
Long-Term Debt was $493 Mil.
Net Income was -21.2 + 21.205 + 16.002 + -25.798 = $-10 Mil.
Non Operating Income was 0.534 + 0.653 + -0.261 + -0.989 = $-0 Mil.
Cash Flow from Operations was 122.893 + 184.321 + 308.196 + 267.188 = $883 Mil.
|Accounts Receivable was $490 Mil.
Revenue was 661.445 + 885.67 + 1060.787 + 985.038 = $3,593 Mil.
Gross Profit was 310.805 + 418.571 + 501.324 + 444.58 = $1,675 Mil.
Total Current Assets was $1,502 Mil.
Total Assets was $7,336 Mil.
Property, Plant and Equipment(Net PPE) was $5,630 Mil.
Depreciation, Depletion and Amortization(DDA) was $584 Mil.
Selling, General & Admin. Expense(SGA) was $131 Mil.
Total Current Liabilities was $347 Mil.
Long-Term Debt was $532 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)|
|=||(351.317 / 1850.063)||/||(490.224 / 3592.94)|
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)|
|=||(1675.28 / 3592.94)||/||(838.701 / 1850.063)|
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 - (1537.672 + 5306.434) / 6976.519)||/||(1 - (1501.691 + 5630.311) / 7335.817)|
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))|
|=||(583.816 / (583.816 + 5630.311))||/||(595.883 / (595.883 + 5306.434))|
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)|
|=||(150.303 / 1850.063)||/||(131.227 / 3592.94)|
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)|
|=||((493.15 + 326.609) / 6976.519)||/||((532.388 + 346.503) / 7335.817)|
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|
|=||(-9.791 - -0.063||-||882.598)||/||6976.519|
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 -3.48 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