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HP Beneish M-Score

: -2.67 (As of Today)
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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.67 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for HP's Beneish M-Score or its related term are showing as below:

HPQ' s Beneish M-Score Range Over the Past 10 Years
Min: -3.72   Med: -2.52   Max: 0.8
Current: -2.67

During the past 13 years, the highest Beneish M-Score of HP was 0.80. The lowest was -3.72. And the median was -2.52.


HP Beneish M-Score Historical Data

The historical data trend for HP's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

HP Annual Data
Trend Oct12 Oct13 Oct14 Oct15 Oct16 Oct17 Oct18 Oct19 Oct20 Oct21
Beneish M-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.59 -2.18 -2.61 -2.69 -2.70

HP Quarterly Data
Jul17 Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22
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 -2.81 -2.71 -2.70 -2.78 -2.67

Competitive Comparison

For the Computer Hardware subindustry, HP's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* 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. Note that "N/A" values will not show up in the chart.

   

HP Beneish M-Score Distribution

For the Hardware industry and Technology sector, HP's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where HP's Beneish M-Score falls into.



HP Beneish M-Score 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 HP 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 * 0.9791+0.528 * 0.9491+0.404 * 1.0119+0.892 * 1.0722+0.115 * 1.0182
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9845+4.679 * -0.0474-0.327 * 0.9739
=-2.67

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Apr22) TTM:Last Year (Apr21) TTM:
Total Receivables was $8,255 Mil.
Revenue was 16490 + 17028 + 16675 + 15289 = $65,482 Mil.
Gross Profit was 3333 + 3385 + 3265 + 3388 = $13,371 Mil.
Total Current Assets was $23,515 Mil.
Total Assets was $39,901 Mil.
Property, Plant and Equipment(Net PPE) was $3,711 Mil.
Depreciation, Depletion and Amortization(DDA) was $786 Mil.
Selling, General, & Admin. Expense(SGA) was $5,777 Mil.
Total Current Liabilities was $28,906 Mil.
Long-Term Debt & Capital Lease Obligation was $9,124 Mil.
Net Income was 1000 + 1086 + 3099 + 1108 = $6,293 Mil.
Non Operating Income was -79 + -59 + 2282 + -67 = $2,077 Mil.
Cash Flow from Operations was 508 + 1657 + 2848 + 1093 = $6,106 Mil.
Total Receivables was $7,864 Mil.
Revenue was 15877 + 15646 + 15258 + 14294 = $61,075 Mil.
Gross Profit was 3440 + 3324 + 2679 + 2393 = $11,836 Mil.
Total Current Assets was $20,091 Mil.
Total Assets was $34,549 Mil.
Property, Plant and Equipment(Net PPE) was $3,612 Mil.
Depreciation, Depletion and Amortization(DDA) was $782 Mil.
Selling, General, & Admin. Expense(SGA) was $5,473 Mil.
Total Current Liabilities was $28,029 Mil.
Long-Term Debt & Capital Lease Obligation was $5,784 Mil.




1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
=(8255 / 65482) / (7864 / 61075)
=0.12606518 / 0.12875972
=0.9791

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)
=(11836 / 61075) / (13371 / 65482)
=0.19379451 / 0.20419352
=0.9491

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 - (23515 + 3711) / 39901) / (1 - (20091 + 3612) / 34549)
=0.31766121 / 0.31393094
=1.0119

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
=65482 / 61075
=1.0722

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))
=(782 / (782 + 3612)) / (786 / (786 + 3711))
=0.17796996 / 0.17478319
=1.0182

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
=(5777 / 65482) / (5473 / 61075)
=0.08822272 / 0.08961113
=0.9845

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 in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((9124 + 28906) / 39901) / ((5784 + 28029) / 34549)
=0.95310894 / 0.97869692
=0.9739

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
=(6293 - 2077 - 6106) / 39901
=-0.0474

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

HP has a M-score of -2.67 suggests that the company is unlikely to be a manipulator.


HP Business Description

HP logo
Address
1501 Page Mill Road, Palo Alto, CA, USA, 94304
HP Inc. is a leading provider of computers, printers, and printer supplies. The company's three operating business segments are its personal systems, containing notebooks, desktops, and workstations; and its printing segment which contains supplies, consumer hardware, and commercial hardware; and corporate investments. In 2015, Hewlett-Packard was separated into HP Inc. and Hewlett Packard Enterprise and the Palo Alto, California-based company sells on a global scale.
Executives
Rucker Kim K.w. director KRAFT FOODS GROUP, INC. THREE LAKES DRIVE NORTHFIELD IL 60093
Clemmer Richard L director P O BOX 34552 LAS VEGAS NV 89129
Miscik Judith A director 300 RENAISSANCE CENTER M/C: 482-C24-A68 DETROIT MI 48265
Faust Jonathan P officer: Global Controller C/O HP INC 1501 PAGE MILL ROAD PALO ALTO CA 94304
Buffett Warren E 10 percent owner 3555 FARNAM ST STE 1440 OMAHA NE 68131
Berkshire Hathaway Inc 10 percent owner 3555 FARNAM STREET OMAHA NE 68131
Broussard Bruce D director 500 W. MAIN STREET C/O HUMANA LAW DEPT. LOUISVILLE KY 40202
Cho Alex officer: President, Personal Systems HP 1501 PAGE MILL ROAD PALO ALTO CA 94304
Anderson Harvey officer: Chief Legal Officer & Sec C/O HP INC. 1501 PAGE MILL RD PALO ALTO CA 94304
Ludgate Kristen M officer: Chief People Officer 3M COMPANY OFFICE OF GENERAL COUNSEL 3M CENTER ST. PAUL MN 55144-1000
Weiszhaar Barbara Barton officer: Acting Controller C/O HP INC. 1501 PAGE MILL ROAD PALO ALTO CA 93404
Mohr Cheryl A. officer: Acting Chief HR Officer C/O HP INC. 1501 PAGE MILL RD PALO ALTO CA 94304
Schell Christoph officer: Chief Commercial Officer 1501 PAGE MILL ROAD PALO ALTO CA 94304
Tran Tuan officer: President of Printing 1501 PAGE MILL ROAD PALO ALTO CA 94304
Matsuoka Yoky director HP 1501 PAGE MILL ROAD PALO ALTO CA 94304

HP Headlines

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