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Quicksilver Resources Inc (NYSE:KWK)
Beneish M-Score
-3.00 (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.

Quicksilver Resources Inc has a M-score of -3.00 suggests that the company is not a manipulator.

KWK' s 10-Year Beneish M-Score Range
Min: -11.36   Max: 1.06
Current: -3

-11.36
1.06

During the past 13 years, the highest Beneish M-Score of Quicksilver Resources Inc was 1.06. The lowest was -11.36. And the median was -2.83.


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 * 1.4827+0.528 * 1.3631+0.404 * 0.526+0.892 * 0.7263+0.115 * 1.2151
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0676+4.679 * -0.1487-0.327 * 1.1037
=-3.00

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $59.5 Mil.
Revenue was 163.498 + 118.032 + 91.786 + 114.244 = $487.6 Mil.
Gross Profit was 94.916 + 40.602 + 18.87 + 44.644 = $199.0 Mil.
Total Current Assets was $396.3 Mil.
Total Assets was $1,268.3 Mil.
Property, Plant and Equipment(Net PPE) was $812.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $57.3 Mil.
Selling, General & Admin. Expense(SGA) was $49.9 Mil.
Total Current Liabilities was $108.5 Mil.
Long-Term Debt was $2,037.8 Mil.
Net Income was 23.757 + -36.095 + -58.833 + -31.779 = $-103.0 Mil.
Non Operating Income was -8.757 + -8.966 + -4.332 + 83.276 = $61.2 Mil.
Cash Flow from Operations was -4.22 + 19.221 + -19.984 + 29.403 = $24.4 Mil.
Accounts Receivable was $55.2 Mil.
Revenue was 153.116 + 175.497 + 118.703 + 223.966 = $671.3 Mil.
Gross Profit was 83.844 + 94.631 + 31.982 + 163.081 = $373.5 Mil.
Total Current Assets was $349.9 Mil.
Total Assets was $1,331.6 Mil.
Property, Plant and Equipment(Net PPE) was $862.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $75.1 Mil.
Selling, General & Admin. Expense(SGA) was $64.4 Mil.
Total Current Liabilities was $115.7 Mil.
Long-Term Debt was $1,926.2 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)
=(59.491 / 487.56) / (55.242 / 671.282)
=0.1220178 / 0.08229328
=1.4827

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)
=(40.602 / 671.282) / (94.916 / 487.56)
=0.55645466 / 0.40822053
=1.3631

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 - (396.3 + 812.48) / 1268.257) / (1 - (349.948 + 862.932) / 1331.613)
=0.04689665 / 0.08916479
=0.526

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
=487.56 / 671.282
=0.7263

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))
=(75.066 / (75.066 + 862.932)) / (57.285 / (57.285 + 812.48))
=0.08002789 / 0.06586262
=1.2151

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)
=(49.912 / 487.56) / (64.371 / 671.282)
=0.10237099 / 0.09589264
=1.0676

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)
=((2037.844 + 108.524) / 1268.257) / ((1926.167 + 115.658) / 1331.613)
=1.69237623 / 1.53334715
=1.1037

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
=(-102.95 - 61.221 - 24.42) / 1268.257
=-0.1487

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 -3.00 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 1.13651.15860.79950.82021.11330.42760.8920.88821.4111.0474
GMI 0.98430.87951.00610.98610.89781.041.1051.23371.04431.1478
AQI 1.15920.64071.23199.20050.42783.45620.24890.99921.79050.7986
SGI 1.27511.72731.25741.43781.42651.04011.11481.01650.75140.792
DEPI 1.09321.02461.05490.86151.12960.64341.15991.0330.44642.0233
SGAI 1.24860.84441.06821.27681.07631.02780.93030.97731.26590.9225
LVGI 1.09921.06361.02810.7111.58151.10130.85530.89012.8830.9603
TATA -0.0621-0.0471-0.0686-0.1475-0.1353-0.3161-0.0143-0.0937-1.85410.1825
M-score -2.41-2.11-2.670.39-3.10-3.52-2.71-2.84-11.38-1.63

Quicksilver Resources Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.99091.50411.4111.26490.9270.85761.04741.3532.06661.4827
GMI 1.2151.3161.09171.13111.09550.85251.19631.131.26181.3631
AQI 2.88681.36961.79051.86930.98761.44980.79860.70180.57430.526
SGI 0.90580.73730.75140.72420.74880.94790.7920.81640.74990.7263
DEPI 0.7880.71650.44640.55370.81831.07632.02331.76631.45061.2151
SGAI 1.19621.23031.26591.25151.14730.93440.92250.91680.91871.0676
LVGI 1.16611.50762.8833.0432.05521.63150.96030.98411.2191.1037
TATA -0.4054-0.8409-1.8541-1.8087-0.7786-0.17930.18110.2015-0.1942-0.1487
M-score -3.71-6.11-11.36-11.29-6.76-3.58-1.61-1.32-2.67-3.00
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