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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 -2.04. The lowest was -3.94. And the median was -2.71.
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 * 0.899||+||0.528 * 0.9951||+||0.404 * 0.6016||+||0.892 * 1.1117||+||0.115 * 0.9862|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9602||+||4.679 * -0.0955||-||0.327 * 1.5745|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $624 Mil.|
Revenue was 883.052 + 1056.585 + 985.038 + 952.087 = $3,877 Mil.
Gross Profit was 413.724 + 502.342 + 444.58 + 436.848 = $1,797 Mil.
Total Current Assets was $1,568 Mil.
Total Assets was $7,344 Mil.
Property, Plant and Equipment(Net PPE) was $5,573 Mil.
Depreciation, Depletion and Amortization(DDA) was $567 Mil.
Selling, General & Admin. Expense(SGA) was $136 Mil.
Total Current Liabilities was $391 Mil.
Long-Term Debt was $533 Mil.
Net Income was 149.537 + 203.042 + 168.688 + 192.279 = $714 Mil.
Non Operating Income was 0.055 + 0.314 + -0.605 + 24.228 = $24 Mil.
Cash Flow from Operations was 422.892 + 389.692 + 320.632 + 257.884 = $1,391 Mil.
|Accounts Receivable was $624 Mil.
Revenue was 893.43 + 889.152 + 864.536 + 840.197 = $3,487 Mil.
Gross Profit was 413.263 + 415.104 + 391.366 + 389.207 = $1,609 Mil.
Total Current Assets was $1,389 Mil.
Total Assets was $6,488 Mil.
Property, Plant and Equipment(Net PPE) was $4,801 Mil.
Depreciation, Depletion and Amortization(DDA) was $481 Mil.
Selling, General & Admin. Expense(SGA) was $128 Mil.
Total Current Liabilities was $438 Mil.
Long-Term Debt was $80 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)|
|=||(623.706 / 3876.762)||/||(624.108 / 3487.315)|
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)|
|=||(502.342 / 3487.315)||/||(413.724 / 3876.762)|
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 - (1568.369 + 5572.818) / 7344.15)||/||(1 - (1388.984 + 4801.236) / 6488.281)|
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))|
|=||(480.791 / (480.791 + 4801.236))||/||(566.67 / (566.67 + 5572.818))|
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)|
|=||(136.274 / 3876.762)||/||(127.667 / 3487.315)|
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)|
|=||((532.908 + 391.145) / 7344.15)||/||((80 + 438.488) / 6488.281)|
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|
|=||(713.546 - 23.992||-||1391.1)||/||7344.15|
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 -3.27 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