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Kennedy-Wilson Holdings Inc (NYSE:KW)
Beneish M-Score
-2.47 (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.

Kennedy-Wilson Holdings Inc has a M-score of -2.47 suggests that the company is not a manipulator.

KW' s Beneish M-Score Range Over the Past 10 Years
Min: -4.01   Max: 2453.21
Current: -2.47

-4.01
2453.21

During the past 9 years, the highest Beneish M-Score of Kennedy-Wilson Holdings Inc was 2453.21. The lowest was -4.01. And the median was -1.87.


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 Kennedy-Wilson Holdings 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 * 0.9736+0.528 * 1.0011+0.404 * 0.967+0.892 * 1.2635+0.115 * 0.9189
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9627+4.679 * -0.0304-0.327 * 1.1393
=-2.47

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $79.1 Mil.
Revenue was 176.5 + 172.1 + 166.3 + 159.2 = $674.1 Mil.
Gross Profit was 167.3 + 170.7 + 166.3 + 158.1 = $662.4 Mil.
Total Current Assets was $935.1 Mil.
Total Assets was $7,696.3 Mil.
Property, Plant and Equipment(Net PPE) was $5,920.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $189.0 Mil.
Selling, General & Admin. Expense(SGA) was $440.2 Mil.
Total Current Liabilities was $436.5 Mil.
Long-Term Debt was $4,695.7 Mil.
Net Income was -1.1 + -6.9 + 29 + 15.4 = $36.4 Mil.
Non Operating Income was 23.4 + 37.1 + 36.8 + 22 = $119.3 Mil.
Cash Flow from Operations was 19.4 + -8.9 + 64 + 76.9 = $151.4 Mil.
Accounts Receivable was $64.3 Mil.
Revenue was 140.5 + 137.7 + 141.6 + 113.7 = $533.5 Mil.
Gross Profit was 140.5 + 136.2 + 135.5 + 112.6 = $524.8 Mil.
Total Current Assets was $1,510.0 Mil.
Total Assets was $7,347.0 Mil.
Property, Plant and Equipment(Net PPE) was $5,007.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $146.5 Mil.
Selling, General & Admin. Expense(SGA) was $361.9 Mil.
Total Current Liabilities was $320.0 Mil.
Long-Term Debt was $3,980.4 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)
=(79.1 / 674.1) / (64.3 / 533.5)
=0.11734164 / 0.12052484
=0.9736

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)
=(524.8 / 533.5) / (662.4 / 674.1)
=0.9836926 / 0.98264352
=1.0011

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 - (935.1 + 5920.7) / 7696.3) / (1 - (1510 + 5007.3) / 7347)
=0.10920832 / 0.11293045
=0.967

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
=674.1 / 533.5
=1.2635

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))
=(146.5 / (146.5 + 5007.3)) / (189 / (189 + 5920.7))
=0.02842563 / 0.03093442
=0.9189

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)
=(440.2 / 674.1) / (361.9 / 533.5)
=0.65301884 / 0.67835052
=0.9627

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)
=((4695.7 + 436.5) / 7696.3) / ((3980.4 + 320) / 7347)
=0.66683991 / 0.58532734
=1.1393

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
=(36.4 - 119.3 - 151.4) / 7696.3
=-0.0304

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.

Kennedy-Wilson Holdings Inc has a M-score of -2.47 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.

Kennedy-Wilson Holdings Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.05764.03427.2090.17992.5061.03440.6496
GMI 1.94640.66560.77691.02741.03340.98710.9522
AQI 0.98051.0240.90540.90540.9220.34160.7829
SGI 2.6760.5861.23871.06871.84013.2381.5146
DEPI 0.68881.40210.81331.4170.6851.01280.8646
SGAI 0.61181.87020.89411.25560.79720.69320.9594
LVGI 0.96780.76841.33391.24580.91420.95331.2035
TATA 0.0065-0.0475-0.0043-0.0345-0.0505-0.0399-0.0318
M-score -1.29-0.473.16-3.43-0.57-0.84-2.68

Kennedy-Wilson Holdings Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.33662.4082.2941.0330.6330.67890.82810.64991.51790.9736
GMI 1.05670.97640.97530.98730.92040.94550.96330.95190.97791.0011
AQI 0.31390.24060.23470.34161.0710.85150.86420.78290.62390.967
SGI 1.94812.06972.42783.24233.19712.57362.01391.51381.31571.2635
DEPI 1.51321.78311.42351.01280.41710.41470.66530.86460.92290.9189
SGAI 0.80470.79480.76280.69230.68470.80910.8610.95991.03830.9627
LVGI 0.75191.33190.99880.95331.33841.22411.1371.20351.17981.1393
TATA -0.0314-0.0521-0.0544-0.0398-0.0297-0.0224-0.0282-0.0318-0.0393-0.0304
M-score -2.47-0.78-0.50-0.84-1.13-1.67-2.00-2.68-2.14-2.47
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