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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 -3.88. And the median was -2.76.
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 * 1.6376||+||0.528 * 1.0327||+||0.404 * 0.8275||+||0.892 * 0.5137||+||0.115 * 0.9454|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 2.1123||+||4.679 * -0.1147||-||0.327 * 1.0229|
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $375 Mil.|
Revenue was 331.708 + 366.486 + 438.191 + 487.847 = $1,624 Mil.
Gross Profit was 117.304 + 180.34 + 216.58 + 211.203 = $725 Mil.
Total Current Assets was $1,573 Mil.
Total Assets was $6,832 Mil.
Property, Plant and Equipment(Net PPE) was $5,145 Mil.
Depreciation, Depletion and Amortization(DDA) was $599 Mil.
Selling, General & Admin. Expense(SGA) was $146 Mil.
Total Current Liabilities was $330 Mil.
Long-Term Debt was $492 Mil.
Net Income was -72.835 + -21.2 + 21.205 + 16.002 = $-57 Mil.
Non Operating Income was -27.88 + 0.534 + 0.653 + -0.261 = $-27 Mil.
Cash Flow from Operations was 138.187 + 122.893 + 184.321 + 308.196 = $754 Mil.
|Accounts Receivable was $446 Mil.
Revenue was 553.8 + 661.445 + 885.67 + 1060.787 = $3,162 Mil.
Gross Profit was 227.526 + 310.805 + 418.571 + 501.324 = $1,458 Mil.
Total Current Assets was $1,439 Mil.
Total Assets was $7,147 Mil.
Property, Plant and Equipment(Net PPE) was $5,563 Mil.
Depreciation, Depletion and Amortization(DDA) was $608 Mil.
Selling, General & Admin. Expense(SGA) was $135 Mil.
Total Current Liabilities was $348 Mil.
Long-Term Debt was $492 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)|
|=||(375.169 / 1624.232)||/||(445.948 / 3161.702)|
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)|
|=||(1458.226 / 3161.702)||/||(725.427 / 1624.232)|
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 - (1572.686 + 5144.733) / 6832.019)||/||(1 - (1439.194 + 5563.17) / 7147.242)|
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))|
|=||(608.039 / (608.039 + 5563.17))||/||(598.587 / (598.587 + 5144.733))|
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)|
|=||(146.183 / 1624.232)||/||(134.712 / 3161.702)|
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)|
|=||((491.847 + 330.12) / 6832.019)||/||((492.443 + 348.197) / 7147.242)|
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|
|=||(-56.828 - -26.954||-||753.597)||/||6832.019|
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 -3.12 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