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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.
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 -1.91.
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 * 0.9582||+||0.528 * 1.0041||+||0.404 * 0.8956||+||0.892 * 1.1903||+||0.115 * 0.9087|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0013||+||4.679 * -0.0315||-||0.327 * 1.1398|
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
|This Year (Sep16) TTM:||Last Year (Sep15) TTM:|
|Accounts Receivable was $64.1 Mil.|
Revenue was 174.3 + 176.5 + 172.1 + 166.3 = $689.2 Mil.
Gross Profit was 171.8 + 167.3 + 170.7 + 166.3 = $676.1 Mil.
Total Current Assets was $1,039.3 Mil.
Total Assets was $7,966.8 Mil.
Property, Plant and Equipment(Net PPE) was $6,155.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $194.1 Mil.
Selling, General & Admin. Expense(SGA) was $455.3 Mil.
Total Current Liabilities was $454.7 Mil.
Long-Term Debt was $4,984.1 Mil.
Net Income was -2 + -1.1 + -6.9 + 29 = $19.0 Mil.
Non Operating Income was 30 + 23.4 + 37.1 + 36.8 = $127.3 Mil.
Cash Flow from Operations was 67.9 + 19.4 + -8.9 + 64 = $142.4 Mil.
|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.
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)|
|=||(64.1 / 689.2)||/||(56.2 / 579)|
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)|
|=||(570.3 / 579)||/||(676.1 / 689.2)|
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 - (1039.3 + 6155) / 7966.8)||/||(1 - (1019.1 + 5484) / 7292.7)|
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))|
|=||(156.7 / (156.7 + 5484))||/||(194.1 / (194.1 + 6155))|
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)|
|=||(455.3 / 689.2)||/||(382 / 579)|
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)|
|=||((4984.1 + 454.7) / 7966.8)||/||((3999.1 + 368.8) / 7292.7)|
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|
|=||(19 - 127.3||-||142.4)||/||7966.8|
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 -2.59 suggests that the company will not 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