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Kennedy-Wilson Holdings Inc (NYSE:KW)
Beneish M-Score
-2.14 (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 -2.14 signals that the company is a manipulator.

KW' s Beneish M-Score Range Over the Past 10 Years
Min: -4.01   Max: 2453.21
Current: -2.14

-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 -1.77.


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 * 1.5179+0.528 * 0.9779+0.404 * 0.6239+0.892 * 1.3157+0.115 * 0.9229
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0383+4.679 * -0.0393-0.327 * 1.1798
=-2.14

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $68.3 Mil.
Revenue was 172.1 + 166.3 + 159.2 + 140.5 = $638.1 Mil.
Gross Profit was 170.7 + 166.3 + 158.1 + 140.5 = $635.6 Mil.
Total Current Assets was $966.4 Mil.
Total Assets was $7,658.4 Mil.
Property, Plant and Equipment(Net PPE) was $5,850.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $178.0 Mil.
Selling, General & Admin. Expense(SGA) was $433.6 Mil.
Total Current Liabilities was $423.9 Mil.
Long-Term Debt was $4,468.6 Mil.
Net Income was -6.9 + 29 + 15.4 + 31.8 = $69.3 Mil.
Non Operating Income was 37.1 + 36.8 + 22 + 88.4 = $184.3 Mil.
Cash Flow from Operations was -8.9 + 64 + 76.9 + 53.9 = $185.9 Mil.
Accounts Receivable was $34.2 Mil.
Revenue was 137.7 + 141.6 + 113.7 + 92 = $485.0 Mil.
Gross Profit was 136.2 + 135.5 + 112.6 + 88.1 = $472.4 Mil.
Total Current Assets was $727.5 Mil.
Total Assets was $6,680.6 Mil.
Property, Plant and Equipment(Net PPE) was $4,776.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $133.8 Mil.
Selling, General & Admin. Expense(SGA) was $317.4 Mil.
Total Current Liabilities was $242.3 Mil.
Long-Term Debt was $3,375.1 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)
=(68.3 / 638.1) / (34.2 / 485)
=0.10703651 / 0.07051546
=1.5179

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)
=(166.3 / 485) / (170.7 / 638.1)
=0.97402062 / 0.99608212
=0.9779

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 - (966.4 + 5850.4) / 7658.4) / (1 - (727.5 + 4776.4) / 6680.6)
=0.10989241 / 0.17613687
=0.6239

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
=638.1 / 485
=1.3157

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))
=(133.8 / (133.8 + 4776.4)) / (178 / (178 + 5850.4))
=0.0272494 / 0.02952691
=0.9229

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)
=(433.6 / 638.1) / (317.4 / 485)
=0.67951732 / 0.65443299
=1.0383

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)
=((4468.6 + 423.9) / 7658.4) / ((3375.1 + 242.3) / 6680.6)
=0.63884101 / 0.54147831
=1.1798

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
=(69.3 - 184.3 - 185.9) / 7658.4
=-0.0393

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 -2.14 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

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.05764.03427.20520.1882.4371.01840.6496
GMI 11.29550.77681.02951.03250.9860.9522
AQI 0.98051.0240.90540.90540.9220.34160.7829
SGI 2.6760.5861.23941.02271.89213.28881.5146
DEPI 0.68881.40210.80631.41880.69011.01280.8646
SGAI 65.60541.03370.8931.31180.77590.68250.9594
LVGI 0.96780.76841.33391.24580.91420.95331.2035
TATA 0.0304-0.0259-0.0181-0.0414-0.05-0.0399-0.0318
M-score -12.860.103.09-3.51-0.58-0.81-2.68

Kennedy-Wilson Holdings Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 2.5080.33662.4082.2941.0330.6330.67890.82810.64991.5179
GMI 1.03351.05670.97640.97530.98730.92040.94550.96330.95190.9779
AQI 0.9220.31390.24060.23470.34161.0710.85150.86420.78290.6239
SGI 1.83861.94812.06972.42783.24233.19712.57362.01391.51381.3157
DEPI 0.6851.51321.78311.42351.01280.41710.41470.66530.86460.9229
SGAI 0.79780.80470.79480.76280.69230.68470.80910.8610.95991.0383
LVGI 0.91420.75191.33190.99880.95331.33841.22411.1371.20351.1798
TATA -0.0504-0.0314-0.0521-0.0544-0.0398-0.0297-0.0224-0.0282-0.0318-0.0393
M-score -0.57-2.47-0.78-0.50-0.84-1.13-1.67-2.00-2.68-2.14
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