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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.
Helmerich & Payne Inc has a M-score of -2.62 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Helmerich & Payne Inc was -1.99. The lowest was -3.94. And the median was -2.72.
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 * 1.0562||+||0.528 * 0.9887||+||0.404 * 0.9113||+||0.892 * 1.0736||+||0.115 * 0.9858|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9817||+||4.679 * -0.0571||-||0.327 * 0.8585|
|This Year (Jun14) TTM:||Last Year (Jun13) TTM:|
|Accounts Receivable was $706 Mil.|
Revenue was 952.087 + 893.43 + 889.152 + 864.536 = $3,599 Mil.
Gross Profit was 436.848 + 413.263 + 415.104 + 391.366 = $1,657 Mil.
Total Current Assets was $1,450 Mil.
Total Assets was $6,693 Mil.
Property, Plant and Equipment(Net PPE) was $4,944 Mil.
Depreciation, Depletion and Amortization(DDA) was $492 Mil.
Selling, General & Admin. Expense(SGA) was $131 Mil.
Total Current Liabilities was $502 Mil.
Long-Term Debt was $80 Mil.
Net Income was 192.279 + 174.57 + 173.182 + 159.797 = $700 Mil.
Non Operating Income was 24.228 + 21.32 + -0.345 + 3.186 = $48 Mil.
Cash Flow from Operations was 257.884 + 235.153 + 304.858 + 235.542 = $1,033 Mil.
|Accounts Receivable was $622 Mil.
Revenue was 840.197 + 838.309 + 844.572 + 829.447 = $3,353 Mil.
Gross Profit was 389.207 + 376.572 + 377.701 + 382.112 = $1,526 Mil.
Total Current Assets was $1,280 Mil.
Total Assets was $6,198 Mil.
Property, Plant and Equipment(Net PPE) was $4,613 Mil.
Depreciation, Depletion and Amortization(DDA) was $452 Mil.
Selling, General & Admin. Expense(SGA) was $124 Mil.
Total Current Liabilities was $433 Mil.
Long-Term Debt was $195 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)|
|=||(705.787 / 3599.205)||/||(622.405 / 3352.525)|
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)|
|=||(413.263 / 3352.525)||/||(436.848 / 3599.205)|
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 - (1450.421 + 4943.66) / 6693.082)||/||(1 - (1280.49 + 4613.301) / 6197.611)|
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))|
|=||(451.967 / (451.967 + 4613.301))||/||(491.979 / (491.979 + 4943.66))|
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)|
|=||(130.799 / 3599.205)||/||(124.11 / 3352.525)|
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)|
|=||((80 + 502.111) / 6693.082)||/||((195 + 432.854) / 6197.611)|
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|
|=||(699.828 - 48.389||-||1033.437)||/||6693.082|
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 -2.62 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