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Beneish M-Score -0.53 higher than -2.22, which implies that it might have manipulated its financial results.
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 -0.52 signals that the company is a manipulator.
During the past 7 years, the highest Beneish M-Score of Kennedy-Wilson Holdings Inc was 6378.70. The lowest was -3.13. And the median was -2.01.
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 * 2.4026||+||0.528 * 1.0559||+||0.404 * 0.3139||+||0.892 * 2.0022||+||0.115 * 1.5132|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.7827||+||4.679 * -0.034||-||0.327 * 0.7519|
|This Year (Mar14) TTM:||Last Year (Mar13) TTM:|
|Accounts Receivable was $230.4 Mil.|
Revenue was 51.5 + 29.64 + 33.208 + 35.955 = $150.3 Mil.
Gross Profit was 41.8 + 29.625 + 32.325 + 30.825 = $134.6 Mil.
Total Current Assets was $1,803.5 Mil.
Total Assets was $4,407.2 Mil.
Property, Plant and Equipment(Net PPE) was $1,878.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $21.6 Mil.
Selling, General & Admin. Expense(SGA) was $145.0 Mil.
Total Current Liabilities was $181.6 Mil.
Long-Term Debt was $1,601.4 Mil.
Net Income was 12.5 + -2.339 + -2.033 + -0.432 = $7.7 Mil.
Non Operating Income was 81 + 41.583 + 1.668 + 11.41 = $135.7 Mil.
Cash Flow from Operations was -36.9 + 48.386 + 6.77 + 3.744 = $22.0 Mil.
|Accounts Receivable was $47.9 Mil.
Revenue was 22.8 + 22.92 + 15.24 + 14.11 = $75.1 Mil.
Gross Profit was 20.9 + 21.995 + 13.965 + 14.11 = $71.0 Mil.
Total Current Assets was $256.3 Mil.
Total Assets was $1,386.1 Mil.
Property, Plant and Equipment(Net PPE) was $403.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $7.1 Mil.
Selling, General & Admin. Expense(SGA) was $92.5 Mil.
Total Current Liabilities was $85.1 Mil.
Long-Term Debt was $660.6 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(230.4 / 150.303)||/||(47.896 / 75.07)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(29.625 / 75.07)||/||(41.8 / 150.303)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1803.5 + 1878.9) / 4407.2)||/||(1 - (256.344 + 403.612) / 1386.101)|
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.
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))|
|=||(7.063 / (7.063 + 403.612))||/||(21.6 / (21.6 + 1878.9))|
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)|
|=||(144.952 / 150.303)||/||(92.496 / 75.07)|
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)|
|=||((1601.4 + 181.6) / 4407.2)||/||((660.632 + 85.134) / 1386.101)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(7.696 - 135.661||-||22)||/||4407.2|
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 -0.52 signals that the company is likely to be a manipulator.
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
Kennedy-Wilson Holdings Inc Annual Data
Kennedy-Wilson Holdings Inc Quarterly Data