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KBR Inc (NYSE:KBR)
Beneish M-Score
-3.14 (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 -3.14 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: -3.14

-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 -2.52.


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 * 0.9998+0.528 * 0.027+0.404 * 1.1438+0.892 * 0.7272+0.115 * 0.9534
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9763+4.679 * 0.0026-0.327 * 0.9109
=-3.14

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $618 Mil.
Revenue was 1009 + 996 + 1080 + 1199 = $4,284 Mil.
Gross Profit was 74 + 68 + 94 + 87 = $323 Mil.
Total Current Assets was $1,801 Mil.
Total Assets was $3,432 Mil.
Property, Plant and Equipment(Net PPE) was $153 Mil.
Depreciation, Depletion and Amortization(DDA) was $39 Mil.
Selling, General & Admin. Expense(SGA) was $142 Mil.
Total Current Liabilities was $1,374 Mil.
Long-Term Debt was $41 Mil.
Net Income was 47 + 42 + 42 + 55 = $186 Mil.
Non Operating Income was 7 + -5 + -2 + 3 = $3 Mil.
Cash Flow from Operations was 9 + -21 + 132 + 54 = $174 Mil.
Accounts Receivable was $850 Mil.
Revenue was 1381 + 1436 + 1417 + 1657 = $5,891 Mil.
Gross Profit was 74 + 70 + -162 + 30 = $12 Mil.
Total Current Assets was $2,154 Mil.
Total Assets was $3,822 Mil.
Property, Plant and Equipment(Net PPE) was $229 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $200 Mil.
Total Current Liabilities was $1,671 Mil.
Long-Term Debt was $59 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)
=(618 / 4284) / (850 / 5891)
=0.1442577 / 0.1442879
=0.9998

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)
=(12 / 5891) / (323 / 4284)
=0.00203701 / 0.07539683
=0.027

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 - (1801 + 153) / 3432) / (1 - (2154 + 229) / 3822)
=0.43065268 / 0.37650445
=1.1438

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
=4284 / 5891
=0.7272

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))
=(55 / (55 + 229)) / (39 / (39 + 153))
=0.19366197 / 0.203125
=0.9534

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)
=(142 / 4284) / (200 / 5891)
=0.03314659 / 0.03395009
=0.9763

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)
=((41 + 1374) / 3432) / ((59 + 1671) / 3822)
=0.41229604 / 0.4526426
=0.9109

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
=(186 - 3 - 174) / 3432
=0.0026

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 -3.14 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.85070.49931.06870.90641.40310.9151.06121.04640.90890.9262
GMI 1.3290.60750.90491.05080.76461.16331.05461.1533-5.6613-0.1601
AQI 0.79810.9421.4281.05881.23350.9811.02821.1510.87521.2143
SGI 0.94390.90781.32431.04520.83430.90140.85360.92840.88250.8005
DEPI 1.28440.55510.94250.92731.20890.95281.09231.01470.62381.2038
SGAI 1.34622.30510.74510.9311.1711.11991.21541.20321.09210.8102
LVGI 0.85080.91441.02590.83161.00740.96340.90730.96391.37110.8567
TATA -0.1380.01310.03450.0618-0.0399-0.03050.0023-0.0394-0.35530.0451
M-score -3.20-3.44-1.81-2.13-2.48-2.72-2.50-2.57-8.08-2.94

KBR Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.78910.87461.00780.90891.00351.0090.88470.92620.93860.9998
GMI 1.57332.2373.1391-5.6613-7.756113.71971.2353-0.1601-0.07940.027
AQI 1.33361.20011.20570.87520.91520.93221.02161.21431.18711.1438
SGI 0.92370.89860.91450.88250.8790.87570.81960.80050.75470.7272
DEPI 0.96490.93080.91650.62380.6630.7630.8111.20381.18510.9534
SGAI 1.26561.22411.11631.09210.96880.90270.89640.81020.91170.9763
LVGI 0.9361.05331.07291.37111.36431.21171.17960.85670.83580.9109
TATA -0.0789-0.1032-0.0906-0.3553-0.3312-0.3009-0.27120.04510.02260.0026
M-score -2.70-2.50-1.81-8.08-8.942.62-3.95-2.94-3.05-3.14
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