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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: -6.19   Max: -1.11
Current: -6.19

-6.19
-1.11

During the past 13 years, the highest Beneish M-Score of Key Energy Services Inc was -1.11. The lowest was -6.19. And the median was -2.96.


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 * 0.7219+0.528 * 2.6272+0.404 * 0.0732+0.892 * 0.5551+0.115 * 0.8222
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4622+4.679 * -0.6671-0.327 * 1.9933
=-6.19

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $116.0 Mil.
Revenue was 150.174 + 176.857 + 197.496 + 267.799 = $792.3 Mil.
Gross Profit was -26.587 + 2.352 + 38.655 + 63.269 = $77.7 Mil.
Total Current Assets was $420.4 Mil.
Total Assets was $1,327.8 Mil.
Property, Plant and Equipment(Net PPE) was $880.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $180.3 Mil.
Selling, General & Admin. Expense(SGA) was $202.6 Mil.
Total Current Liabilities was $154.5 Mil.
Long-Term Debt was $961.7 Mil.
Net Income was -152.485 + -640.161 + -65.379 + -59.676 = $-917.7 Mil.
Non Operating Income was 0.705 + -5.976 + 0.223 + -4.447 = $-9.5 Mil.
Cash Flow from Operations was -1.548 + -19.64 + 1.466 + -2.664 = $-22.4 Mil.
Accounts Receivable was $289.5 Mil.
Revenue was 354.802 + 365.798 + 350.595 + 356.141 = $1,427.3 Mil.
Gross Profit was 88.448 + 93.686 + 87.712 + 97.839 = $367.7 Mil.
Total Current Assets was $433.8 Mil.
Total Assets was $2,322.8 Mil.
Property, Plant and Equipment(Net PPE) was $1,235.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $200.7 Mil.
Selling, General & Admin. Expense(SGA) was $249.6 Mil.
Total Current Liabilities was $241.9 Mil.
Long-Term Debt was $737.7 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)
=(115.992 / 792.326) / (289.466 / 1427.336)
=0.14639429 / 0.20280158
=0.7219

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)
=(2.352 / 1427.336) / (-26.587 / 792.326)
=0.25760227 / 0.09805181
=2.6272

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 - (420.426 + 880.032) / 1327.798) / (1 - (433.795 + 1235.258) / 2322.763)
=0.02059048 / 0.28143638
=0.0732

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
=792.326 / 1427.336
=0.5551

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))
=(200.738 / (200.738 + 1235.258)) / (180.271 / (180.271 + 880.032))
=0.13979008 / 0.17001838
=0.8222

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)
=(202.631 / 792.326) / (249.646 / 1427.336)
=0.25574195 / 0.17490346
=1.4622

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)
=((961.7 + 154.483) / 1327.798) / ((737.691 + 241.858) / 2322.763)
=0.84062711 / 0.42171715
=1.9933

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
=(-917.701 - -9.495 - -22.386) / 1327.798
=-0.6671

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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.99071.17290.92611.041.14040.90551.0041.06270.9250.7219
GMI 0.87180.96681.1121.31941.00420.78511.0591.10821.16392.6272
AQI 0.85621.06390.81381.45020.98091.07630.86351.03911.01750.0732
SGI 1.29881.07491.18660.5471.06951.60091.06130.81210.89680.5551
DEPI 1.00851.23160.90160.79411.32191.07260.95790.91471.0130.8222
SGAI 0.91871.20210.94271.26771.03740.750.91231.18471.25541.4622
LVGI 0.90490.98361.120.95360.87321.09281.02060.92211.09521.9933
TATA -0.0594-0.0375-0.1602-0.2283-0.0519-0.0178-0.1335-0.0971-0.1471-0.6672
M-score -2.58-2.42-3.19-3.62-2.47-2.18-3.07-2.99-3.31-6.19

Key Energy Services Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.06891.06270.98890.85550.91120.9250.8070.74120.63130.7219
GMI 1.13731.10821.08471.10581.16151.16391.17941.17131.37562.6272
AQI 0.99591.03911.05771.05241.06611.01751.03570.99630.1130.0732
SGI 0.85860.81210.79890.81160.84590.89680.88130.81310.69490.5551
DEPI 0.87460.91470.93290.97650.97481.0131.00890.97750.92830.8222
SGAI 1.14291.18471.13641.12111.14381.25541.41951.49591.52431.4622
LVGI 0.93370.92210.92580.91821.0111.09521.12851.28381.81481.9933
TATA -0.0971-0.097-0.1127-0.1519-0.1408-0.1471-0.1515-0.1254-0.5496-0.6671
M-score -2.94-2.99-3.14-3.41-3.28-3.31-3.48-3.56-6.19-6.19
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