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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 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 * 0.9438+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 1.12520.92190.99071.22680.89671.26610.92781.00170.90461.0627
GMI 0.91680.87890.87180.96681.1121.31941.00420.78511.0591.1082
AQI 1.14640.8770.85621.06390.81381.24031.14691.05890.87771.0391
SGI 1.06711.20521.29881.07491.18660.5471.06951.60091.06130.8121
DEPI 0.8310.95841.00851.23160.90160.8521.2321.08280.94890.9147
SGAI 1.42650.78680.91871.20210.94271.26771.03740.750.91231.1847
LVGI 0.94010.94850.90490.98361.120.95360.87321.09281.02060.9221
TATA -0.0625-0.1189-0.0594-0.0375-0.1404-0.2049-0.0297-0.0171-0.1335-0.0971
M-score -2.66-2.99-2.58-2.37-3.12-3.38-2.50-2.09-3.15-2.99

Key Energy Services Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.86150.78380.80790.90461.12841.19981.19131.06270.89960.9438
GMI 0.79860.86770.95971.0591.14171.15781.11781.10821.08471.1058
AQI 1.01971.04060.86370.87770.91090.94850.99591.03911.05771.0524
SGI 1.50281.36931.18661.06130.9790.89270.84680.81210.79890.8116
DEPI 1.06641.05350.99510.94890.91060.88320.87460.91470.93290.9809
SGAI 0.77270.81950.84860.91230.9661.04471.13981.18471.13641.1211
LVGI 1.05741.05951.02941.02060.97460.96070.93370.92210.92580.9182
TATA -0.0675-0.0829-0.1124-0.1335-0.115-0.0946-0.0971-0.0971-0.1128-0.152
M-score -2.55-2.77-3.08-3.15-2.88-2.78-2.85-2.99-3.22-3.33
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