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KBR Inc (NYSE:KBR)
Beneish M-Score
-2.82 (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 -2.82 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: -2.82

-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 * 1.3235+0.528 * 0.264+0.404 * 1.3202+0.892 * 0.7653+0.115 * 0.9472
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0671+4.679 * -0.0167-0.327 * 1.2264
=-2.82

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $708 Mil.
Revenue was 1073 + 1009 + 996 + 1080 = $4,158 Mil.
Gross Profit was -36 + 74 + 68 + 94 = $200 Mil.
Total Current Assets was $1,790 Mil.
Total Assets was $4,242 Mil.
Property, Plant and Equipment(Net PPE) was $165 Mil.
Depreciation, Depletion and Amortization(DDA) was $41 Mil.
Selling, General & Admin. Expense(SGA) was $147 Mil.
Total Current Liabilities was $1,550 Mil.
Long-Term Debt was $690 Mil.
Net Income was -63 + 47 + 42 + 42 = $68 Mil.
Non Operating Income was -1 + 7 + -5 + -2 = $-1 Mil.
Cash Flow from Operations was 20 + 9 + -21 + 132 = $140 Mil.
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.



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)
=(708 / 4158) / (699 / 5433)
=0.17027417 / 0.1286582
=1.3235

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)
=(69 / 5433) / (200 / 4158)
=0.01270017 / 0.04810005
=0.264

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 - (1790 + 165) / 4242) / (1 - (1962 + 198) / 3651)
=0.53913248 / 0.40838127
=1.3202

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
=4158 / 5433
=0.7653

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))
=(46 / (46 + 198)) / (41 / (41 + 165))
=0.18852459 / 0.19902913
=0.9472

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)
=(147 / 4158) / (180 / 5433)
=0.03535354 / 0.03313087
=1.0671

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)
=((690 + 1550) / 4242) / ((56 + 1516) / 3651)
=0.52805281 / 0.43056697
=1.2264

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
=(68 - -1 - 140) / 4242
=-0.0167

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 -2.82 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.

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 0.85080.91441.02590.83161.00740.96340.90730.96391.37110.8456
TATA -0.1380.01310.03450.0618-0.0399-0.03050.0023-0.0394-0.35530.0451
M-score -3.20-3.44-1.81-2.13-2.48-2.72-2.50-2.57-8.08-2.93

KBR Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.87461.00780.90891.00351.0090.88470.92620.93860.99981.3235
GMI 2.2373.1391-5.6613-7.756113.71971.2353-0.1601-0.07940.0270.264
AQI 1.20011.20570.87520.91520.93221.02161.21431.18711.14381.3202
SGI 0.89860.91450.88250.8790.87570.81960.80050.75470.72720.7653
DEPI 0.93080.91650.62380.6630.7630.8111.20381.18510.95340.9472
SGAI 1.22411.11631.09210.96880.90270.89640.81020.91170.97631.0671
LVGI 1.05331.07291.37111.36431.21171.17960.84560.83580.91091.2264
TATA -0.1032-0.0906-0.3553-0.3312-0.3009-0.27120.04510.02260.0026-0.0167
M-score -2.50-1.81-8.08-8.942.62-3.95-2.93-3.05-3.14-2.82
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