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Key Energy Services Inc (NYSE:KEG)
Beneish M-Score
-6.19 (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 -6.19 suggests that the company is not a manipulator.

KEG' s Beneish M-Score Range Over the Past 10 Years
Min: -17.73   Max: -0.72
Current: -6.19

-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 -2.70.


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 * 0.6313+0.528 * 1.3756+0.404 * 0.113+0.892 * 0.6949+0.115 * 0.9283
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.5243+4.679 * -0.5496-0.327 * 1.8148
=-6.19

* 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 $129.3 Mil.
Revenue was 176.857 + 197.496 + 267.799 + 354.802 = $997.0 Mil.
Gross Profit was 2.352 + 38.655 + 63.269 + 88.448 = $192.7 Mil.
Total Current Assets was $440.7 Mil.
Total Assets was $1,494.0 Mil.
Property, Plant and Equipment(Net PPE) was $1,005.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $186.6 Mil.
Selling, General & Admin. Expense(SGA) was $237.3 Mil.
Total Current Liabilities was $138.3 Mil.
Long-Term Debt was $961.6 Mil.
Net Income was -640.161 + -65.379 + -59.676 + -52.304 = $-817.5 Mil.
Non Operating Income was -5.976 + 0.223 + -4.447 + -3.485 = $-13.7 Mil.
Cash Flow from Operations was -19.64 + 1.466 + -2.664 + 38.084 = $17.2 Mil.
Accounts Receivable was $294.8 Mil.
Revenue was 365.798 + 350.595 + 356.141 + 362.164 = $1,434.7 Mil.
Gross Profit was 93.686 + 87.712 + 97.839 + 102.283 = $381.5 Mil.
Total Current Assets was $482.4 Mil.
Total Assets was $2,406.6 Mil.
Property, Plant and Equipment(Net PPE) was $1,246.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $211.8 Mil.
Selling, General & Admin. Expense(SGA) was $224.1 Mil.
Total Current Liabilities was $217.7 Mil.
Long-Term Debt was $758.6 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)
=(129.328 / 996.954) / (294.828 / 1434.698)
=0.12972314 / 0.2054983
=0.6313

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)
=(38.655 / 1434.698) / (2.352 / 996.954)
=0.26592356 / 0.19331283
=1.3756

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 - (440.663 + 1005.826) / 1494.024) / (1 - (482.365 + 1246.544) / 2406.646)
=0.03181676 / 0.28161059
=0.113

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
=996.954 / 1434.698
=0.6949

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))
=(211.819 / (211.819 + 1246.544)) / (186.565 / (186.565 + 1005.826))
=0.14524436 / 0.15646294
=0.9283

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)
=(237.343 / 996.954) / (224.078 / 1434.698)
=0.23806816 / 0.15618479
=1.5243

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)
=((961.566 + 138.306) / 1494.024) / ((758.565 + 217.701) / 2406.646)
=0.73618094 / 0.40565418
=1.8148

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
=(-817.52 - -13.685 - 17.246) / 1494.024
=-0.5496

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 -6.19 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.92190.99071.17290.92611.17381.0970.89080.941.06270.925
GMI 0.87890.87180.96681.1121.25030.98390.79891.1211.10821.1639
AQI 0.8770.85621.06390.81381.45020.98091.07630.86351.03911.0295
SGI 1.20521.29881.07491.18660.48461.11191.62731.13350.81210.8968
DEPI 0.95841.00851.23160.90160.79411.32191.07260.95790.91471.013
SGAI 0.78680.91871.20210.94271.37840.97280.7370.91071.18471.2554
LVGI 0.94850.90490.98361.120.95360.87321.09281.02060.92211.1021
TATA -0.1189-0.0594-0.0375-0.1404-0.2049-0.0312-0.019-0.1335-0.097-0.1464
M-score -2.99-2.58-2.42-3.10-3.50-2.37-2.16-3.03-2.99-3.30

Key Energy Services Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.16391.06891.06270.98890.85550.91120.9250.8070.74120.6313
GMI 1.1911.13731.10821.08471.10581.16151.16391.17941.17131.3756
AQI 0.94850.99591.03911.05771.05241.06611.02951.03570.99630.113
SGI 0.92020.85860.81210.79890.81160.84590.89680.88130.81310.6949
DEPI 0.88320.87460.91470.93290.97650.97481.0131.00890.97750.9283
SGAI 1.04611.14291.18471.13641.12111.14381.25541.41951.49591.5243
LVGI 0.96070.93370.92210.92580.91821.0111.10211.12851.28381.8148
TATA -0.0946-0.0971-0.097-0.1127-0.1519-0.1408-0.1464-0.1515-0.1254-0.5496
M-score -2.77-2.94-2.99-3.14-3.41-3.28-3.30-3.48-3.56-6.19
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