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Kennedy-Wilson Holdings Inc (NYSE:KW)
Beneish M-Score
-1.67 (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 -1.67 signals that the company is a manipulator.

KW' s 10-Year Beneish M-Score Range
Min: -4   Max: 1628.83
Current: -1.67

-4
1628.83

During the past 8 years, the highest Beneish M-Score of Kennedy-Wilson Holdings Inc was 1628.83. The lowest was -4.00. And the median was -1.78.


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 * 0.6789+0.528 * 0.9455+0.404 * 0.8515+0.892 * 2.5736+0.115 * 0.4147
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8091+4.679 * -0.0224-0.327 * 1.2241
=-1.67

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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.
Net Income was 31.8 + -1.5 + -28.8 + -0.2 = $1.3 Mil.
Non Operating Income was 88.4 + -7.5 + -7.1 + 21.7 = $95.5 Mil.
Cash Flow from Operations was 53.9 + -16.6 + 12.4 + 20.6 = $70.3 Mil.
Accounts Receivable was $36.8 Mil.
Revenue was 92 + 51.5 + 30.3 + 33.5 = $207.3 Mil.
Gross Profit was 88.1 + 41.8 + 30.3 + 32.6 = $192.8 Mil.
Total Current Assets was $1,081.4 Mil.
Total Assets was $5,354.7 Mil.
Property, Plant and Equipment(Net PPE) was $3,563.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $42.5 Mil.
Selling, General & Admin. Expense(SGA) was $173.8 Mil.
Total Current Liabilities was $285.7 Mil.
Long-Term Debt was $2,274.7 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)
=(64.3 / 533.5) / (36.8 / 207.3)
=0.12052484 / 0.1775205
=0.6789

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)
=(136.2 / 207.3) / (140.5 / 533.5)
=0.93005306 / 0.9836926
=0.9455

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 - (1510 + 5007.3) / 7347) / (1 - (1081.4 + 3563.1) / 5354.7)
=0.11293045 / 0.13263115
=0.8515

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
=533.5 / 207.3
=2.5736

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))
=(42.5 / (42.5 + 3563.1)) / (146.5 / (146.5 + 5007.3))
=0.01178722 / 0.02842563
=0.4147

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)
=(361.9 / 533.5) / (173.8 / 207.3)
=0.67835052 / 0.83839846
=0.8091

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)
=((3980.4 + 320) / 7347) / ((2274.7 + 285.7) / 5354.7)
=0.58532734 / 0.47815937
=1.2241

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
=(1.3 - 95.5 - 70.3) / 7347
=-0.0224

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 -1.67 signals that the company is likely to 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

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 7.20520.18782.40111.0344
GMI 0.77681.0291.03190.9871
AQI 0.90540.90540.9220.3416
SGI 1.23941.02341.92043.238
DEPI 0.80631.42940.6851.0128
SGAI 0.8931.3120.76380.6932
LVGI 1.33391.24580.91420.9533
TATA -0.0082-0.0324-0.0505-0.0399
M-score 3.13-3.47-0.59-0.84

Kennedy-Wilson Holdings Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.97820.27621.14342.4030.32452.34072.23971.0330.6330.6789
GMI 1.05781.10441.06391.0321.05450.97360.97340.98730.92040.9455
AQI 0.87360.84540.89310.9220.31390.24060.23470.34161.0710.8515
SGI 1.1421.36481.56671.91892.02082.12922.48663.24233.19712.5736
DEPI 1.66651.56761.28440.6851.51321.78311.42351.01280.41710.4147
SGAI 1.23341.09911.02070.76440.77580.77260.74480.69230.68470.8091
LVGI 1.13270.71971.23810.91420.75191.33190.99880.95331.33841.2241
TATA -0.0233-0.0032-0.0107-0.0504-0.0314-0.0521-0.0544-0.0398-0.0297-0.0224
M-score -2.51-2.70-1.95-0.59-2.41-0.78-0.50-0.84-1.13-1.67
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