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GuruFocus has detected 3 Warning Signs with Helmerich & Payne Inc $HP.
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Helmerich & Payne Inc (NYSE:HP)
Beneish M-Score
-2.64 (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.

Helmerich & Payne Inc has a M-score of -2.64 suggests that the company is not a manipulator.

HP' s Beneish M-Score Range Over the Past 10 Years
Min: -4.21   Max: -2.01
Current: -2.64

-4.21
-2.01

During the past 13 years, the highest Beneish M-Score of Helmerich & Payne Inc was -2.01. The lowest was -4.21. And the median was -2.73.


Definition

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 * 1.5198+0.528 * 1.2603+0.404 * 1.025+0.892 * 0.6875+0.115 * 0.9386
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.6212+4.679 * -0.0854-0.327 * 0.9869
=-2.64

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

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $346 Mil.
Revenue was 405.283 + 368.59 + 331.708 + 366.486 = $1,472 Mil.
Gross Profit was 108.454 + 120.911 + 117.304 + 180.34 = $527 Mil.
Total Current Assets was $1,364 Mil.
Total Assets was $6,538 Mil.
Property, Plant and Equipment(Net PPE) was $5,061 Mil.
Depreciation, Depletion and Amortization(DDA) was $602 Mil.
Selling, General & Admin. Expense(SGA) was $148 Mil.
Total Current Liabilities was $301 Mil.
Long-Term Debt was $492 Mil.
Net Income was -48.818 + -35.063 + -72.835 + -21.2 = $-178 Mil.
Non Operating Income was 0.174 + 0.387 + -27.88 + 0.534 = $-27 Mil.
Cash Flow from Operations was 75.691 + 70.668 + 138.187 + 122.893 = $407 Mil.
Accounts Receivable was $331 Mil.
Revenue was 438.191 + 487.847 + 553.8 + 661.445 = $2,141 Mil.
Gross Profit was 216.58 + 211.203 + 227.526 + 310.805 = $966 Mil.
Total Current Assets was $1,460 Mil.
Total Assets was $7,025 Mil.
Property, Plant and Equipment(Net PPE) was $5,446 Mil.
Depreciation, Depletion and Amortization(DDA) was $603 Mil.
Selling, General & Admin. Expense(SGA) was $133 Mil.
Total Current Liabilities was $371 Mil.
Long-Term Debt was $493 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables 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)
=(345.546 / 1472.067) / (330.726 / 2141.283)
=0.23473524 / 0.15445226
=1.5198

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)
=(966.114 / 2141.283) / (527.009 / 1472.067)
=0.45118464 / 0.35800612
=1.2603

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1363.887 + 5061.368) / 6538.184) / (1 - (1460.377 + 5446.352) / 7025.105)
=0.01727223 / 0.01685042
=1.025

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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=1472.067 / 2141.283
=0.6875

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))
=(603.205 / (603.205 + 5446.352)) / (601.565 / (601.565 + 5061.368))
=0.09971061 / 0.10622852
=0.9386

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)
=(148.079 / 1472.067) / (132.866 / 2141.283)
=0.10059257 / 0.06204972
=1.6212

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)
=((492.373 + 301.417) / 6538.184) / ((492.919 + 371.328) / 7025.105)
=0.12140833 / 0.12302265
=0.9869

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
=(-177.916 - -26.785 - 407.439) / 6538.184
=-0.0854

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 -2.64 suggests that the company will not be a manipulator.


Related Terms

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


Historical Data

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

Helmerich & Payne Inc Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
DSRI 0.8961.09630.54561.76290.82811.08740.93181.03460.74321.6376
GMI 0.97661.00960.98071.11030.98050.98260.98130.9850.99731.0327
AQI 0.7760.741.77880.74190.93571.11960.63640.72040.53330.8275
SGI 1.33051.24970.92640.99391.35661.2391.07481.09690.85080.5137
DEPI 1.00890.87211.09560.89560.93960.96620.92110.96790.9310.9454
SGAI 0.68680.96331.11791.38730.82730.94711.09460.97681.17042.1123
LVGI 1.13040.93870.7940.80090.93740.77320.84360.95731.44611.0229
TATA -0.0609-0.0473-0.1304-0.0722-0.1086-0.0733-0.0675-0.0695-0.1409-0.1147
M-score -2.66-2.48-3.21-2.18-2.82-2.41-2.92-2.79-3.88-3.12

Helmerich & Payne Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.02870.89820.69650.74320.76460.96081.39311.63761.50331.5198
GMI 0.99190.9940.98640.99731.02351.02871.03091.03271.06921.2603
AQI 0.55450.60160.62190.53330.61160.60970.68310.82751.12771.025
SGI 1.13271.11260.99720.85080.66590.55190.51440.51370.58130.6875
DEPI 0.99650.98370.96270.9310.91560.9280.92970.94540.96070.9386
SGAI 0.95070.95981.00711.17041.48271.76592.22142.11231.90391.6212
LVGI 0.82231.57451.37751.44611.7640.97780.98081.02290.92240.9869
TATA -0.0773-0.0972-0.1183-0.1409-0.1556-0.1428-0.1296-0.1147-0.0895-0.0854
M-score -2.81-3.27-3.60-3.88-4.21-3.86-3.48-3.12-2.86-2.64
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