Baker Beneish M Score

BKR
 Stock
  

USD 29.63  0.44  1.46%   

This module uses fundamental data of Baker Hughes to approximate the value of its Beneish M Score. Baker Hughes M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Continue to Baker Hughes Piotroski F Score and Baker Hughes Altman Z Score analysis.
  
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As of 06/29/2022, Debt Current is likely to grow to about 41.1 M, while Total Debt is likely to drop slightly above 6.6 B. Baker Hughes Return on Investment is relatively stable at the moment as compared to the past year. Baker Hughes reported last year Return on Investment of 6.23. As of 06/29/2022, Cash Flow Per Share is likely to grow to 2.50, while Inventory Turnover is likely to drop 3.65.
At this time, it appears that Baker Hughes A is an unlikely manipulator. The earnings manipulation may begin if Baker Hughes' top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Baker Hughes executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Baker Hughes' earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.88
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables0.97Focus
Asset QualityN/AFocus
Expense Coverage1.02Focus
Gross Margin Strengs0.96Focus
Accruals Factor1.02Focus
Depreciation Resistance1.06Focus
Net Sales Growth1.07Focus
Financial Leverage Condition0.85Focus

Baker Hughes Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Baker Hughes' auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Revenues21.9 B20.5 B
Notably Up
Increasing
Slightly volatile
Selling General and Administrative Expense2.7 B2.5 B
Significantly Up
Increasing
Slightly volatile
Net Cash Flow from OperationsB2.4 B
Fairly Down
Decreasing
Very volatile
Depreciation Amortization and Accretion1.1 B1.1 B
Sufficiently Up
Increasing
Slightly volatile
Total Assets41.8 B35.3 B
Fairly Up
Increasing
Slightly volatile
Property Plant and Equipment Net5.4 B4.9 B
Moderately Up
Increasing
Slightly volatile
Trade and Non Trade Receivables5.9 B5.7 B
Sufficiently Up
Increasing
Slightly volatile
Total Liabilities18.7 B18.6 B
Slightly Up
Increasing
Slightly volatile
Current Assets15.9 B15.1 B
Notably Up
Increasing
Slightly volatile
Assets Non Current25.9 B20.2 B
Significantly Up
Increasing
Slightly volatile
Current Liabilities9.7 B9.1 B
Notably Up
Increasing
Slightly volatile
Liabilities Non CurrentB9.4 B
Sufficiently Down
Increasing
Slightly volatile
Total Debt6.6 B6.7 B
Fairly Down
Increasing
Slightly volatile
Debt Current41.1 M40 M
Fairly Up
Increasing
Very volatile
Debt Non Current6.2 B6.7 B
Significantly Down
Increasing
Slightly volatile
Operating Income1.4 B1.3 B
Significantly Up
Decreasing
Slightly volatile
Gross Margin0.190.197
Sufficiently Down
Decreasing
Slightly volatile

Baker Hughes A Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Baker Hughes' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Baker Hughes in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Baker Hughes' degree of accounting gimmicks and manipulations.

About Baker Hughes Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Operating Expenses

2.81 Billion

Share
Baker Hughes Operating Expenses is relatively stable at the moment as compared to the past year. Baker Hughes reported last year Operating Expenses of 2.74 Billion

Baker Hughes Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Baker Hughes. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201720182019202020212022 (projected)
Revenues17.18 B22.88 B23.84 B20.7 B20.5 B21.94 B
Total Assets56.5 B52.44 B53.37 B38.01 B35.31 B41.78 B
Current Assets18.42 B14.97 B15.22 B16.45 B15.06 B15.86 B
Assets Non Current38.08 B37.47 B38.15 B21.55 B20.24 B25.92 B
Total Liabilities18.09 B17.43 B18.87 B19.77 B18.56 B18.72 B
Current Liabilities9.23 B9.02 B10.01 B10.23 B9.13 B9.69 B
Total Debt8.35 B7.23 B6.62 B7.63 B6.73 B6.62 B
Debt Current2.04 B942 M321 M889 M40 M41.05 M
Debt Non Current6.31 B6.29 B6.3 B6.74 B6.69 B6.2 B
Operating Income(284 M)701 M1.07 B(15.98 B)1.31 B1.41 B
Gross Margin0.220.180.170.190.160.2

About Baker Hughes Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Baker Hughes A's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Baker Hughes using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Baker Hughes A based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. The company was formerly known as Baker Hughes, a GE company and changed its name to Baker Hughes Company in October 2019. Baker Hughes operates under Oil Gas Equipment Services classification in the United States and is traded on NASDAQ Exchange. It employs 55000 people.

Baker Hughes Investors Sentiment

The influence of Baker Hughes' investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Baker. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock markets does not have a solid backing from leading economists and market statisticians.

Baker Hughes Implied Volatility

    
  47.69  
Baker Hughes' implied volatility exposes the market's sentiment of Baker Hughes A stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Baker Hughes' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Baker Hughes stock will not fluctuate a lot when Baker Hughes' options are near their expiration.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Baker Hughes in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Baker Hughes' short interest history, or implied volatility extrapolated from Baker Hughes options trading.

Current Sentiment - BKR

Baker Hughes A Investor Sentiment

Greater number of Macroaxis users are currently bullish on Baker Hughes A. What is your opinion about investing in Baker Hughes A? Are you bullish or bearish?
Bullish
Bearish
98% Bullish
2% Bearish

Pair Trading with Baker Hughes

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Baker Hughes position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Baker Hughes will appreciate offsetting losses from the drop in the long position's value.

Baker Hughes Pair Correlation

Correlation Analysis For Direct Indexing and Tax-loss Harvesting

The ability to find closely correlated positions to Baker Hughes could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Baker Hughes when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Baker Hughes - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Baker Hughes A to buy it.
The correlation of Baker Hughes is a statistical measure of how it moves in relation to other equities. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Baker Hughes moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Baker Hughes A moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Baker Hughes can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
Continue to Baker Hughes Piotroski F Score and Baker Hughes Altman Z Score analysis. Note that the Baker Hughes A information on this page should be used as a complementary analysis to other Baker Hughes' statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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Is Baker Hughes' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Baker Hughes. If investors know Baker will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Baker Hughes listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
-0.65
Market Capitalization
32.6 B
Quarterly Revenue Growth YOY
0.011
Return On Assets
0.0292
Return On Equity
0.021
The market value of Baker Hughes A is measured differently than its book value, which is the value of Baker that is recorded on the company's balance sheet. Investors also form their own opinion of Baker Hughes' value that differs from its market value or its book value, called intrinsic value, which is Baker Hughes' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Baker Hughes' market value can be influenced by many factors that don't directly affect Baker Hughes' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Baker Hughes' value and its price as these two are different measures arrived at by different means. Investors typically determine Baker Hughes value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Baker Hughes' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.