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Kennedy-Wilson Holdings Inc (NYSE:KW)
Beneish M-Score
-2.68 (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 -2.68 suggests that the company is not a manipulator.

KW' s Beneish M-Score Range Over the Past 10 Years
Min: -3.47   Max: 3.14
Current: -2.68

-3.47
3.14

During the past 9 years, the highest Beneish M-Score of Kennedy-Wilson Holdings Inc was 3.14. The lowest was -3.47. And the median was -0.84.


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 * 0.6499+0.528 * 0.9519+0.404 * 0.7829+0.892 * 1.5138+0.115 * 0.8646
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9599+4.679 * -0.0318-0.327 * 1.2035
=-2.68

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $54.7 Mil.
Revenue was 166.3 + 159.2 + 140.5 + 137.7 = $603.7 Mil.
Gross Profit was 166.3 + 158.1 + 140.5 + 136.2 = $601.1 Mil.
Total Current Assets was $786.3 Mil.
Total Assets was $7,640.1 Mil.
Property, Plant and Equipment(Net PPE) was $5,825.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $166.3 Mil.
Selling, General & Admin. Expense(SGA) was $403.8 Mil.
Total Current Liabilities was $414.2 Mil.
Long-Term Debt was $4,360.8 Mil.
Net Income was 29 + 15.4 + 31.8 + -1.5 = $74.7 Mil.
Non Operating Income was 36.8 + 22 + 88.4 + -7.5 = $139.7 Mil.
Cash Flow from Operations was 64 + 76.9 + 53.9 + -16.6 = $178.2 Mil.
Accounts Receivable was $55.6 Mil.
Revenue was 141.6 + 113.7 + 92 + 51.5 = $398.8 Mil.
Gross Profit was 135.5 + 112.6 + 88.1 + 41.8 = $378.0 Mil.
Total Current Assets was $993.3 Mil.
Total Assets was $6,332.1 Mil.
Property, Plant and Equipment(Net PPE) was $4,250.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $104.5 Mil.
Selling, General & Admin. Expense(SGA) was $277.9 Mil.
Total Current Liabilities was $264.9 Mil.
Long-Term Debt was $3,023.3 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)
=(54.7 / 603.7) / (55.6 / 398.8)
=0.09060792 / 0.13941825
=0.6499

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)
=(158.1 / 398.8) / (166.3 / 603.7)
=0.94784353 / 0.99569323
=0.9519

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 - (786.3 + 5825.4) / 7640.1) / (1 - (993.3 + 4250.1) / 6332.1)
=0.13460557 / 0.17193348
=0.7829

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
=603.7 / 398.8
=1.5138

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))
=(104.5 / (104.5 + 4250.1)) / (166.3 / (166.3 + 5825.4))
=0.02399761 / 0.02775506
=0.8646

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)
=(403.8 / 603.7) / (277.9 / 398.8)
=0.66887527 / 0.69684052
=0.9599

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)
=((4360.8 + 414.2) / 7640.1) / ((3023.3 + 264.9) / 6332.1)
=0.62499182 / 0.5192906
=1.2035

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
=(74.7 - 139.7 - 178.2) / 7640.1
=-0.0318

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 -2.68 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 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

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.11582.5080.33662.4082.2941.0330.6330.67890.82810.6499
GMI 1.06181.03351.05670.97640.97530.98730.92040.94550.96330.9519
AQI 0.89310.9220.31390.24060.23470.34161.0710.85150.86420.7829
SGI 1.60531.83861.94812.06972.42783.24233.19712.57362.01391.5138
DEPI 1.27650.6851.51321.78311.42351.01280.41710.41470.66530.8646
SGAI 0.99550.79780.80470.79480.76280.69230.68470.80910.8610.9599
LVGI 1.23810.91420.75191.33190.99880.95331.33841.22411.1371.2035
TATA -0.0124-0.0504-0.0314-0.0521-0.0544-0.0398-0.0297-0.0224-0.0282-0.0318
M-score -1.95-0.57-2.47-0.78-0.50-0.84-1.13-1.67-2.00-2.68
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