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Key Energy Services Inc (NYSE:KEG)
Beneish M-Score
-3.33 (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 -3.33 suggests that the company is not a manipulator.

KEG' s 10-Year Beneish M-Score Range
Min: -17.73   Max: -0.72
Current: -3.33

-17.73
-0.72

During the past 11 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 * 0.9438+0.528 * 1.1058+0.404 * 1.0524+0.892 * 0.8116+0.115 * 0.9809
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1211+4.679 * -0.152-0.327 * 0.9182
=-3.33

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $332 Mil.
Revenue was 350.595 + 356.141 + 362.164 + 389.673 = $1,459 Mil.
Gross Profit was 87.712 + 97.839 + 102.283 + 121.376 = $409 Mil.
Total Current Assets was $452 Mil.
Total Assets was $2,458 Mil.
Property, Plant and Equipment(Net PPE) was $1,326 Mil.
Depreciation, Depletion and Amortization(DDA) was $216 Mil.
Selling, General & Admin. Expense(SGA) was $212 Mil.
Total Current Liabilities was $217 Mil.
Long-Term Debt was $719 Mil.
Net Income was -52.196 + -11.899 + -12.518 + -4.848 = $-81 Mil.
Non Operating Income was 2.703 + 0.069 + 0.054 + 0.051 = $3 Mil.
Cash Flow from Operations was 61.574 + 45.694 + 71.625 + 110.337 = $289 Mil.
Accounts Receivable was $433 Mil.
Revenue was 411.39 + 428.449 + 466.471 + 490.851 = $1,797 Mil.
Gross Profit was 124.288 + 129.267 + 148.918 + 155.052 = $558 Mil.
Total Current Assets was $620 Mil.
Total Assets was $2,732 Mil.
Property, Plant and Equipment(Net PPE) was $1,395 Mil.
Depreciation, Depletion and Amortization(DDA) was $222 Mil.
Selling, General & Admin. Expense(SGA) was $232 Mil.
Total Current Liabilities was $265 Mil.
Long-Term Debt was $868 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)
=(331.776 / 1458.573) / (433.136 / 1797.161)
=0.22746616 / 0.24101124
=0.9438

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)
=(97.839 / 1797.161) / (87.712 / 1458.573)
=0.31022541 / 0.28055504
=1.1058

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 - (452.491 + 1325.508) / 2457.606) / (1 - (619.867 + 1394.593) / 2732.437)
=0.27653212 / 0.26276068
=1.0524

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
=1458.573 / 1797.161
=0.8116

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))
=(222.4 / (222.4 + 1394.593)) / (216.175 / (216.175 + 1325.508))
=0.13753925 / 0.14022014
=0.9809

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)
=(211.519 / 1458.573) / (232.478 / 1797.161)
=0.14501777 / 0.12935847
=1.1211

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)
=((718.704 + 216.843) / 2457.606) / ((867.832 + 265.017) / 2732.437)
=0.38067412 / 0.41459291
=0.9182

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
=(-81.461 - 2.877 - 289.23) / 2457.606
=-0.152

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 -3.33 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 1.22680.89671.4290.89250.88790.941.0627
GMI 0.96681.1121.25030.98390.79891.1211.1082
AQI 1.06390.81381.45020.98091.07630.86351.0391
SGI 1.07491.18660.48461.11191.62731.13350.8121
DEPI 1.23160.90160.79411.32191.07260.95790.9147
SGAI 1.20210.94271.37840.97280.7370.91071.1847
LVGI 0.98361.120.95360.87321.09281.02060.9221
TATA -0.0375-0.1404-0.2049-0.0312-0.019-0.1335-0.0971
M-score -2.37-3.12-3.26-2.56-2.16-3.03-2.99

Key Energy Services Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.82160.72640.73120.941.07551.16391.17491.06270.89960.9438
GMI 0.8290.92451.03671.1211.19281.1911.13731.10821.08471.1058
AQI 1.01971.04060.86370.86350.91090.94850.99591.03911.05771.0524
SGI 1.57581.47751.31111.13351.02710.92020.85860.81210.79890.8116
DEPI 1.06641.05350.99510.95790.91060.88320.87460.91470.93290.9809
SGAI 0.75630.80480.8360.91070.96641.04611.14291.18471.13641.1211
LVGI 1.05741.05951.02941.02060.97460.96070.93370.92210.92580.9182
TATA -0.0691-0.0844-0.1135-0.1335-0.115-0.0946-0.0971-0.0971-0.1128-0.152
M-score -2.51-2.70-3.00-3.03-2.85-2.77-2.85-2.99-3.22-3.33
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