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Kennedy-Wilson Holdings Inc (NYSE:KW)
Beneish M-Score
-2.64 (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 -2.59 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: -2.64

-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 -1.91.


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 * 0.9582+0.528 * 1.0041+0.404 * 0.8956+0.892 * 1.1903+0.115 * 0.9087
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0013+4.679 * -0.0315-0.327 * 1.1398
=-2.59

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $64.1 Mil.
Revenue was 174.3 + 176.5 + 172.1 + 166.3 = $689.2 Mil.
Gross Profit was 171.8 + 167.3 + 170.7 + 166.3 = $676.1 Mil.
Total Current Assets was $1,039.3 Mil.
Total Assets was $7,966.8 Mil.
Property, Plant and Equipment(Net PPE) was $6,155.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $194.1 Mil.
Selling, General & Admin. Expense(SGA) was $455.3 Mil.
Total Current Liabilities was $454.7 Mil.
Long-Term Debt was $4,984.1 Mil.
Net Income was -2 + -1.1 + -6.9 + 29 = $19.0 Mil.
Non Operating Income was 30 + 23.4 + 37.1 + 36.8 = $127.3 Mil.
Cash Flow from Operations was 67.9 + 19.4 + -8.9 + 64 = $142.4 Mil.
Accounts Receivable was $56.2 Mil.
Revenue was 159.2 + 140.5 + 137.7 + 141.6 = $579.0 Mil.
Gross Profit was 158.1 + 140.5 + 136.2 + 135.5 = $570.3 Mil.
Total Current Assets was $1,019.1 Mil.
Total Assets was $7,292.7 Mil.
Property, Plant and Equipment(Net PPE) was $5,484.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $156.7 Mil.
Selling, General & Admin. Expense(SGA) was $382.0 Mil.
Total Current Liabilities was $368.8 Mil.
Long-Term Debt was $3,999.1 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)
=(64.1 / 689.2) / (56.2 / 579)
=0.09300638 / 0.0970639
=0.9582

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)
=(570.3 / 579) / (676.1 / 689.2)
=0.98497409 / 0.98099246
=1.0041

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 - (1039.3 + 6155) / 7966.8) / (1 - (1019.1 + 5484) / 7292.7)
=0.0969649 / 0.10827266
=0.8956

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
=689.2 / 579
=1.1903

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))
=(156.7 / (156.7 + 5484)) / (194.1 / (194.1 + 6155))
=0.02778024 / 0.03057126
=0.9087

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)
=(455.3 / 689.2) / (382 / 579)
=0.66062101 / 0.6597582
=1.0013

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)
=((4984.1 + 454.7) / 7966.8) / ((3999.1 + 368.8) / 7292.7)
=0.68268314 / 0.59894141
=1.1398

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
=(19 - 127.3 - 142.4) / 7966.8
=-0.0315

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 -2.59 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 local exchange's 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 0.98051.0240.90540.90540.9220.34160.5239
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 0.96780.76841.33391.24580.91420.95331.1993
TATA 0.0065-0.0475-0.0043-0.0345-0.0505-0.0399-0.032
M-score -1.29-0.473.16-3.43-0.57-0.84-2.78

Kennedy-Wilson Holdings Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 2.4082.2941.0330.6330.67890.82810.64991.51790.97360.9582
GMI 0.97640.97530.98730.92040.94550.96330.95190.97791.00111.0041
AQI 0.24060.23470.34161.0710.85150.86420.52390.62390.7930.8956
SGI 2.06972.42783.24233.19712.57362.01391.51381.31571.26351.1903
DEPI 1.78311.42351.01280.41710.41470.66530.86460.92290.91890.9087
SGAI 0.79480.76280.69230.68470.80910.8610.95991.03830.96271.0013
LVGI 1.33190.99880.95331.33841.22411.1371.19931.17981.13931.1398
TATA -0.0521-0.0544-0.0398-0.0297-0.0224-0.0282-0.032-0.0393-0.0304-0.0315
M-score -0.78-0.50-0.84-1.13-1.67-2.00-2.79-2.14-2.54-2.59
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