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Key Energy Services Inc (NYSE:KEG)
Beneish M-Score
-3.30 (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 -3.30 suggests that the company is not a manipulator.

KEG' s 10-Year Beneish M-Score Range
Min: -5.26   Max: -0.97
Current: -3.3

-5.26
-0.97

During the past 13 years, the highest Beneish M-Score of Key Energy Services Inc was -0.97. The lowest was -5.26. And the median was -2.84.


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 * 0.925+0.528 * 1.1639+0.404 * 1.0295+0.892 * 0.8968+0.115 * 1.013
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2554+4.679 * -0.1464-0.327 * 1.1021
=-3.30

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $289 Mil.
Revenue was 354.802 + 365.798 + 350.595 + 356.141 = $1,427 Mil.
Gross Profit was 88.448 + 93.686 + 87.712 + 97.839 = $368 Mil.
Total Current Assets was $434 Mil.
Total Assets was $2,333 Mil.
Property, Plant and Equipment(Net PPE) was $1,235 Mil.
Depreciation, Depletion and Amortization(DDA) was $201 Mil.
Selling, General & Admin. Expense(SGA) was $250 Mil.
Total Current Liabilities was $242 Mil.
Long-Term Debt was $748 Mil.
Net Income was -52.304 + -62.229 + -52.196 + -11.899 = $-179 Mil.
Non Operating Income was -3.485 + -0.36 + 2.703 + 0.069 = $-1 Mil.
Cash Flow from Operations was 38.084 + 18.816 + 61.574 + 45.694 = $164 Mil.
Accounts Receivable was $349 Mil.
Revenue was 362.164 + 389.673 + 411.39 + 428.449 = $1,592 Mil.
Gross Profit was 102.283 + 121.376 + 124.288 + 129.267 = $477 Mil.
Total Current Assets was $506 Mil.
Total Assets was $2,587 Mil.
Property, Plant and Equipment(Net PPE) was $1,366 Mil.
Depreciation, Depletion and Amortization(DDA) was $225 Mil.
Selling, General & Admin. Expense(SGA) was $222 Mil.
Total Current Liabilities was $232 Mil.
Long-Term Debt was $764 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)
=(289.466 / 1427.336) / (348.966 / 1591.676)
=0.20280158 / 0.21924437
=0.925

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)
=(93.686 / 1591.676) / (88.448 / 1427.336)
=0.29981856 / 0.25760227
=1.1639

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 - (433.795 + 1235.258) / 2333.498) / (1 - (506.153 + 1365.646) / 2587.47)
=0.28474205 / 0.27659103
=1.0295

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
=1427.336 / 1591.676
=0.8968

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))
=(225.297 / (225.297 + 1365.646)) / (200.738 / (200.738 + 1235.258))
=0.14161224 / 0.13979008
=1.013

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)
=(249.646 / 1427.336) / (221.753 / 1591.676)
=0.17490346 / 0.13932044
=1.2554

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)
=((748.426 + 241.858) / 2333.498) / ((763.981 + 232.344) / 2587.47)
=0.42437748 / 0.3850576
=1.1021

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
=(-178.628 - -1.073 - 164.168) / 2333.498
=-0.1464

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 -3.30 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.77810.941.00351.16391.06891.06270.98890.85550.91120.925
GMI 1.03671.1211.19281.1911.13731.10821.08471.10581.16151.1639
AQI 0.86370.86350.91090.94850.99591.03911.05771.05241.06611.0295
SGI 1.31111.13351.02710.92020.85860.81210.79890.81160.84590.8968
DEPI 0.99510.95790.91060.88320.87460.91470.93290.98090.98151.013
SGAI 0.8360.91070.96641.04611.14291.18471.13641.12111.14381.2554
LVGI 1.02941.02060.97460.96070.93370.92210.92580.91821.0111.1021
TATA -0.1135-0.1335-0.115-0.0946-0.0971-0.097-0.1127-0.1519-0.1408-0.1464
M-score -2.96-3.03-2.92-2.77-2.94-2.99-3.14-3.41-3.28-3.30
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