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Kennedy-Wilson Holdings Inc (NYSE:KW)
Beneish M-Score
-2.00 (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 -2.00 signals that the company is a manipulator.

KW' s Beneish M-Score Range Over the Past 10 Years
Min: -4   Max: 1628.83
Current: -2

-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 -1.89.


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 * 0.8281+0.528 * 0.9633+0.404 * 0.8642+0.892 * 2.0139+0.115 * 0.6653
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.861+4.679 * -0.0282-0.327 * 1.137
=-2.00

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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.
Net Income was 15.4 + 31.8 + -1.5 + -28.8 = $16.9 Mil.
Non Operating Income was 22 + 88.4 + -7.5 + -7.1 = $95.8 Mil.
Cash Flow from Operations was 76.9 + 53.9 + -16.6 + 12.4 = $126.6 Mil.
Accounts Receivable was $33.7 Mil.
Revenue was 113.7 + 92 + 51.5 + 30.3 = $287.5 Mil.
Gross Profit was 112.6 + 88.1 + 41.8 + 30.3 = $272.8 Mil.
Total Current Assets was $1,136.5 Mil.
Total Assets was $5,713.3 Mil.
Property, Plant and Equipment(Net PPE) was $3,861.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $72.7 Mil.
Selling, General & Admin. Expense(SGA) was $220.3 Mil.
Total Current Liabilities was $261.2 Mil.
Long-Term Debt was $2,748.3 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)
=(56.2 / 579) / (33.7 / 287.5)
=0.0970639 / 0.11721739
=0.8281

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)
=(140.5 / 287.5) / (158.1 / 579)
=0.94886957 / 0.98497409
=0.9633

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 - (1019.1 + 5484) / 7292.7) / (1 - (1136.5 + 3861) / 5713.3)
=0.10827266 / 0.12528661
=0.8642

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
=579 / 287.5
=2.0139

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))
=(72.7 / (72.7 + 3861)) / (156.7 / (156.7 + 5484))
=0.01848133 / 0.02778024
=0.6653

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)
=(382 / 579) / (220.3 / 287.5)
=0.6597582 / 0.76626087
=0.861

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)
=((3999.1 + 368.8) / 7292.7) / ((2748.3 + 261.2) / 5713.3)
=0.59894141 / 0.52675336
=1.137

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
=(16.9 - 95.8 - 126.6) / 7292.7
=-0.0282

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 -2.00 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 0.05764.03427.20520.18782.40111.0344
GMI 1.94640.66560.77681.0291.03190.9871
AQI 0.98051.0240.90540.90540.9220.3416
SGI 2.6760.5861.23941.02341.92043.238
DEPI 0.68881.40210.80631.42940.6851.0128
SGAI 0.61181.87020.8931.3120.76380.6932
LVGI 0.96780.76841.33391.24580.91420.9533
TATA 0.0304-0.0432-0.0082-0.0324-0.0505-0.0399
M-score -1.18-0.453.13-3.47-0.59-0.84

Kennedy-Wilson Holdings Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 0.27621.14342.4030.32452.34072.23971.0330.6330.67890.8281
GMI 1.10441.06391.0321.05450.97360.97340.98730.92040.94550.9633
AQI 0.84540.89310.9220.31390.24060.23470.34161.0710.85150.8642
SGI 1.36481.56671.91892.02082.12922.48663.24233.19712.57362.0139
DEPI 1.56761.28440.6851.51321.78311.42351.01280.41710.41470.6653
SGAI 1.09911.02070.76440.77580.77260.74480.69230.68470.80910.861
LVGI 0.71971.23810.91420.75191.33190.99880.95331.33841.22411.137
TATA -0.0032-0.0107-0.0504-0.0314-0.0521-0.0544-0.0398-0.0297-0.0224-0.0282
M-score -2.70-1.95-0.59-2.41-0.78-0.50-0.84-1.13-1.67-2.00
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