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BHP Billiton Ltd  (NYSE:BHP) Beneish M-Score: -3.00 (As of Today)

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.

BHP Billiton Ltd has a M-score of signals that the company is a manipulator.

NYSE:BHP' s Beneish M-Score Range Over the Past 10 Years
Min: -12.65   Max: -1.85
Current: -3

-12.65
-1.85

During the past 13 years, the highest Beneish M-Score of BHP Billiton Ltd was -1.85. The lowest was -12.65. And the median was -2.77.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

BHP Billiton Ltd Annual Data

Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.09 -3.13 -2.95 -3.23 -3.00

BHP Billiton Ltd Semi-Annual Data

Dec07 Jun08 Dec08 Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.95 0.00 -3.23 0.00 -3.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 BHP Billiton Ltd 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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jun17) TTM:Last Year (Jun16) TTM:
Accounts Receivable was $3,031 Mil.
Revenue was $38,285 Mil.
Gross Profit was $0 Mil.
Total Current Assets was $21,056 Mil.
Total Assets was $117,006 Mil.
Property, Plant and Equipment(Net PPE) was $80,497 Mil.
Depreciation, Depletion and Amortization(DDA) was $7,719 Mil.
Selling, General, & Admin. Expense(SGA) was $0 Mil.
Total Current Liabilities was $11,366 Mil.
Long-Term Debt & Capital Lease Obligation was $29,233 Mil.
Net Income was $5,890 Mil.
Gross Profit was $-556 Mil.
Cash Flow from Operations was $16,804 Mil.
Accounts Receivable was $3,722 Mil.
Revenue was $30,912 Mil.
Gross Profit was $22,261 Mil.
Total Current Assets was $17,714 Mil.
Total Assets was $118,953 Mil.
Property, Plant and Equipment(Net PPE) was $83,975 Mil.
(DDA) was $8,661 Mil.
Selling, General, & Admin. Expense(SGA) was $4,230 Mil.
Total Current Liabilities was $12,340 Mil.
Long-Term Debt & Capital Lease Obligation was $31,768 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(3031 / 38285) / (3722 / 30912)
=0.07916939 / 0.12040631
=

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(22261 / 30912) / (0 / 38285)
=0.72014105 / 0
=

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (21056 + 80497) / 117006) / (1 - (17714 + 83975) / 118953)
=0.13207015 / 0.14513295
=

4. SGI = Sales Growth Index

Ratio of Revenue 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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=38285 / 30912
=

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(8661 / (8661 + 83975)) / (7719 / (7719 + 80497))
=0.09349497 / 0.08750113
=

6. SGAI = Sales, General and Administrative expenses Index

The ratio of c 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)
=(0 / 38285) / (4230 / 30912)
=0 / 0.13684006
=

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)
=((29233 + 11366) / 117006) / ((31768 + 12340) / 118953)
=0.34698221 / 0.37080191
=

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(5890 - -556 - 16804) / 117006
=-0.0885

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.

BHP Billiton Ltd has a M-score of signals that the company is likely to be a manipulator.


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