Switch to:
KBR Inc (NYSE:KBR)
Beneish M-Score
-3.95 (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.

KBR Inc has a M-score of -3.95 suggests that the company is not a manipulator.

KBR' s Beneish M-Score Range Over the Past 10 Years
Min: -8.94   Max: 2.62
Current: -3.95

-8.94
2.62

During the past 13 years, the highest Beneish M-Score of KBR Inc was 2.62. The lowest was -8.94. And the median was -2.50.


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 KBR 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 * 0.8847+0.528 * 1.2353+0.404 * 1.0216+0.892 * 0.8196+0.115 * 0.811
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8964+4.679 * -0.2712-0.327 * 1.1796
=-3.95

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $699 Mil.
Revenue was 1199 + 1381 + 1436 + 1417 = $5,433 Mil.
Gross Profit was 87 + 74 + 70 + -162 = $69 Mil.
Total Current Assets was $1,962 Mil.
Total Assets was $3,651 Mil.
Property, Plant and Equipment(Net PPE) was $198 Mil.
Depreciation, Depletion and Amortization(DDA) was $46 Mil.
Selling, General & Admin. Expense(SGA) was $180 Mil.
Total Current Liabilities was $1,516 Mil.
Long-Term Debt was $56 Mil.
Net Income was 55 + 62 + 44 + -1241 = $-1,080 Mil.
Non Operating Income was 3 + -5 + 6 + -1 = $3 Mil.
Cash Flow from Operations was 54 + -31 + -108 + -8 = $-93 Mil.
Accounts Receivable was $964 Mil.
Revenue was 1657 + 1659 + 1633 + 1680 = $6,629 Mil.
Gross Profit was 30 + 28 + 39 + 7 = $104 Mil.
Total Current Assets was $2,823 Mil.
Total Assets was $5,386 Mil.
Property, Plant and Equipment(Net PPE) was $410 Mil.
Depreciation, Depletion and Amortization(DDA) was $74 Mil.
Selling, General & Admin. Expense(SGA) was $245 Mil.
Total Current Liabilities was $1,896 Mil.
Long-Term Debt was $70 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)
=(699 / 5433) / (964 / 6629)
=0.1286582 / 0.14542163
=0.8847

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)
=(74 / 6629) / (87 / 5433)
=0.01568864 / 0.01270017
=1.2353

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 - (1962 + 198) / 3651) / (1 - (2823 + 410) / 5386)
=0.40838127 / 0.39974007
=1.0216

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
=5433 / 6629
=0.8196

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))
=(74 / (74 + 410)) / (46 / (46 + 198))
=0.15289256 / 0.18852459
=0.811

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)
=(180 / 5433) / (245 / 6629)
=0.03313087 / 0.03695882
=0.8964

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)
=((56 + 1516) / 3651) / ((70 + 1896) / 5386)
=0.43056697 / 0.36502042
=1.1796

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
=(-1080 - 3 - -93) / 3651
=-0.2712

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.

KBR Inc has a M-score of -3.95 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 own currency.

KBR Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.85070.49931.06870.90641.40310.89941.07971.04640.9089
GMI 1.3290.60750.90491.05080.76460.94921.29251.1533-5.6613
AQI 0.79810.9421.4281.05881.23350.9811.02821.1510.8691
SGI 0.94390.90781.32431.04520.83430.9170.8390.92840.8825
DEPI 1.28440.55510.94250.92731.20890.95281.09231.01470.6238
SGAI 1.34622.30510.74510.9311.1711.10081.23641.20321.0921
LVGI 0.85080.91441.02590.83161.00740.96340.90730.96391.3616
TATA -0.14040.01330.03450.0618-0.0399-0.03050.001-0.0394-0.3451
M-score -3.21-3.44-1.81-2.13-2.48-2.83-2.38-2.57-8.03

KBR Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.20980.91391.04640.78910.87461.00780.90891.00351.0090.8847
GMI 1.36821.88581.15331.57332.2373.1391-5.6613-7.756113.71971.2353
AQI 1.01891.09841.1511.33361.20011.20570.86910.91520.93221.0216
SGI 0.8760.88930.92840.92370.89860.91450.88250.8790.87570.8196
DEPI 1.14791.04241.01470.96490.93080.91650.62380.6630.7630.811
SGAI 1.19891.2611.20321.26561.22411.11631.09210.96880.90270.8964
LVGI 0.89330.82050.96390.9361.05331.07291.36161.36431.21171.1796
TATA 0.0061-0.0122-0.0394-0.0783-0.1026-0.09-0.3451-0.3312-0.3009-0.2712
M-score -2.15-2.19-2.57-2.70-2.50-1.81-8.03-8.942.62-3.95
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK