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Key Energy Services Inc (NYSE:KEG)
Beneish M-Score
-3.22 (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.

Key Energy Services Inc has a M-score of -3.22 suggests that the company is not a manipulator.

KEG' s 10-Year Beneish M-Score Range
Min: -17.73   Max: -0.72
Current: -3.22

-17.73
-0.72

During the past 13 years, the highest Beneish M-Score of Key Energy Services Inc was -0.72. The lowest was -17.73. And the median was -2.64.


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 Key Energy Services 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 * 0.8996+0.528 * 1.0847+0.404 * 1.0577+0.892 * 0.7989+0.115 * 0.9329
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1364+4.679 * -0.1128-0.327 * 0.9258
=-3.22

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $321 Mil.
Revenue was 356.141 + 362.164 + 389.673 + 411.39 = $1,519 Mil.
Gross Profit was 97.839 + 102.283 + 121.376 + 124.288 = $446 Mil.
Total Current Assets was $499 Mil.
Total Assets was $2,552 Mil.
Property, Plant and Equipment(Net PPE) was $1,343 Mil.
Depreciation, Depletion and Amortization(DDA) was $222 Mil.
Selling, General & Admin. Expense(SGA) was $211 Mil.
Total Current Liabilities was $216 Mil.
Long-Term Debt was $764 Mil.
Net Income was -11.899 + -12.518 + -4.848 + -4.128 = $-33 Mil.
Non Operating Income was 0.069 + 0.054 + 0.051 + -0.43 = $-0 Mil.
Cash Flow from Operations was 45.694 + 71.625 + 110.337 + 27.119 = $255 Mil.
Accounts Receivable was $446 Mil.
Revenue was 428.449 + 466.471 + 490.851 + 515.997 = $1,902 Mil.
Gross Profit was 129.267 + 148.918 + 155.052 + 172.001 = $605 Mil.
Total Current Assets was $616 Mil.
Total Assets was $2,761 Mil.
Property, Plant and Equipment(Net PPE) was $1,420 Mil.
Depreciation, Depletion and Amortization(DDA) was $217 Mil.
Selling, General & Admin. Expense(SGA) was $233 Mil.
Total Current Liabilities was $267 Mil.
Long-Term Debt was $878 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)
=(320.722 / 1519.368) / (446.223 / 1901.768)
=0.21108908 / 0.23463588
=0.8996

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)
=(102.283 / 1901.768) / (97.839 / 1519.368)
=0.31825018 / 0.29340226
=1.0847

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 - (499.077 + 1343.453) / 2551.627) / (1 - (616.118 + 1419.65) / 2761.301)
=0.27789994 / 0.26275042
=1.0577

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
=1519.368 / 1901.768
=0.7989

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))
=(216.644 / (216.644 + 1419.65)) / (222.199 / (222.199 + 1343.453))
=0.13239919 / 0.14192107
=0.9329

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)
=(211.374 / 1519.368) / (232.823 / 1901.768)
=0.13911969 / 0.1224245
=1.1364

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)
=((763.843 + 215.97) / 2551.627) / ((877.971 + 267.303) / 2761.301)
=0.38399539 / 0.41475884
=0.9258

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
=(-33.393 - -0.256 - 254.775) / 2551.627
=-0.1128

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.

Key Energy Services Inc has a M-score of -3.22 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.

Key Energy Services Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.12520.92190.99071.22680.89671.4290.89250.88790.941.0627
GMI 0.91680.87890.87180.96681.1121.25030.98390.79891.1211.1082
AQI 1.14640.8770.85621.06390.81381.45020.98091.07630.86351.0391
SGI 1.06711.20521.29881.07491.18660.48461.11191.62731.13350.8121
DEPI 0.8310.95841.00851.23160.90160.79411.32191.07260.95790.9147
SGAI 1.42650.78680.91871.20210.94271.37840.97280.7370.91071.1847
LVGI 0.94010.94850.90490.98361.120.95360.87321.09281.02060.9221
TATA -0.0625-0.1189-0.0594-0.0375-0.1404-0.2049-0.0312-0.019-0.1335-0.0971
M-score -2.66-2.99-2.58-2.37-3.12-3.26-2.56-2.16-3.03-2.99

Key Energy Services Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.88790.82160.72640.73120.941.07551.16391.17491.06270.8996
GMI 0.79890.8290.92451.03671.1211.19281.1911.13731.10821.0847
AQI 1.07631.01971.04060.86370.86350.91090.94850.99591.03911.0577
SGI 1.62731.57581.47751.31111.13351.02710.92020.85860.81210.7989
DEPI 1.07261.06641.05350.99510.95790.91060.88320.87460.91470.9329
SGAI 0.7370.75630.80480.8360.91070.96641.04611.14291.18471.1364
LVGI 1.09281.05741.05951.02941.02060.97460.96070.93370.92210.9258
TATA -0.019-0.0691-0.0844-0.1135-0.1335-0.115-0.0946-0.0971-0.0971-0.1128
M-score -2.16-2.51-2.70-3.00-3.03-2.85-2.77-2.85-2.99-3.22
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