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Quicksilver Resources Inc (NYSE:KWK)
Beneish M-Score
-2.30 (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.

Quicksilver Resources Inc has a M-score of -2.30 suggests that the company is not a manipulator.

KWK' s 10-Year Beneish M-Score Range
Min: -12.46   Max: 1.06
Current: -2.3

-12.46
1.06

During the past 13 years, the highest Beneish M-Score of Quicksilver Resources Inc was 1.06. The lowest was -12.46. And the median was -2.78.


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 Quicksilver Resources 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 * 2.1141+0.528 * 1.1268+0.404 * 0.5743+0.892 * 0.733+0.115 * 1.6917
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9398+4.679 * -0.1103-0.327 * 1.219
=-2.30

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $69.6 Mil.
Revenue was 118.032 + 91.786 + 114.244 + 153.116 = $477.2 Mil.
Gross Profit was 40.602 + 18.87 + 60.106 + 79.166 = $198.7 Mil.
Total Current Assets was $180.1 Mil.
Total Assets was $1,059.0 Mil.
Property, Plant and Equipment(Net PPE) was $815.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $57.7 Mil.
Selling, General & Admin. Expense(SGA) was $49.1 Mil.
Total Current Liabilities was $139.9 Mil.
Long-Term Debt was $1,795.6 Mil.
Net Income was -36.095 + -58.833 + -31.779 + 10.577 = $-116.1 Mil.
Non Operating Income was -8.966 + -4.332 + -7.551 + -4.151 = $-25.0 Mil.
Cash Flow from Operations was 19.221 + -19.984 + 29.403 + -2.997 = $25.6 Mil.
Accounts Receivable was $44.9 Mil.
Revenue was 175.497 + 118.703 + 179.072 + 177.702 = $651.0 Mil.
Gross Profit was 94.631 + 31.982 + 92.793 + 86.114 = $305.5 Mil.
Total Current Assets was $355.5 Mil.
Total Assets was $1,394.2 Mil.
Property, Plant and Equipment(Net PPE) was $892.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $112.4 Mil.
Selling, General & Admin. Expense(SGA) was $71.2 Mil.
Total Current Liabilities was $121.8 Mil.
Long-Term Debt was $1,968.4 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)
=(69.556 / 477.178) / (44.885 / 650.974)
=0.14576531 / 0.06895053
=2.1141

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)
=(18.87 / 650.974) / (40.602 / 477.178)
=0.4693275 / 0.41649867
=1.1268

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 - (180.116 + 815.331) / 1059.047) / (1 - (355.507 + 892.85) / 1394.151)
=0.06005399 / 0.10457547
=0.5743

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
=477.178 / 650.974
=0.733

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))
=(112.406 / (112.406 + 892.85)) / (57.706 / (57.706 + 815.331))
=0.11181828 / 0.066098
=1.6917

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)
=(49.073 / 477.178) / (71.234 / 650.974)
=0.10284003 / 0.1094268
=0.9398

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)
=((1795.644 + 139.949) / 1059.047) / ((1968.407 + 121.84) / 1394.151)
=1.82767431 / 1.49929742
=1.219

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
=(-116.13 - -25 - 25.643) / 1059.047
=-0.1103

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.

Quicksilver Resources Inc has a M-score of -2.30 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.

Quicksilver Resources Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.13651.15860.79950.82021.11330.43780.87131.4790.94711.092
GMI 0.98430.87951.00610.98610.89781.041.11271.02861.40951.0129
AQI 1.15920.64071.23199.20050.42781.24440.69130.99922.78140.5141
SGI 1.27511.72731.25741.43781.42651.04011.11481.01650.71090.8371
DEPI 1.09321.02461.05490.86151.12960.77070.98891.01150.3492.5877
SGAI 1.24860.84441.06821.27681.07631.02780.93030.97731.3380.8728
LVGI 1.09921.06361.02810.7111.58151.15790.81350.89013.09710.8939
TATA -0.0621-0.0471-0.0686-0.1475-0.1353-0.316-0.0173-0.0937-2.11880.1825
M-score -2.41-2.11-2.670.39-3.10-4.40-2.57-2.41-12.58-1.64

Quicksilver Resources Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.8561.05661.49010.94711.24720.84980.92781.0921.33062.1141
GMI 0.96740.98920.95531.36091.55761.46411.40991.12450.9811.1268
AQI 1.2022.88681.36962.78141.86930.98761.44980.51410.70180.5743
SGI 0.95490.84950.74430.71090.73440.81680.87630.83710.83010.733
DEPI 1.00510.75990.66250.3490.48220.71321.03432.58772.02831.6917
SGAI 1.07831.27551.21891.3381.2341.05181.01080.87280.90160.9398
LVGI 0.85711.16611.50763.09713.0432.05521.63150.89390.98411.219
TATA -0.0972-0.3187-0.6723-2.087-2.0216-1.0713-0.59150.2460.2721-0.1103
M-score -3.01-3.43-5.52-12.46-12.07-7.94-5.23-1.28-1.04-2.30
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