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Quicksilver Resources Inc (NYSE:KWK)
Beneish M-Score
-2.58 (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 -2.58 suggests that the company is not a manipulator.

KWK' s 10-Year Beneish M-Score Range
Min: -11.83   Max: 1.06
Current: -2.58

-11.83
1.06

During the past 13 years, the highest Beneish M-Score of Quicksilver Resources Inc was 1.06. The lowest was -11.83. And the median was -2.80.


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 * 1.353+0.528 * 1.0818+0.404 * 0.7018+0.892 * 0.8164+0.115 * 1.7663
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9168+4.679 * -0.0615-0.327 * 0.9841
=-2.58

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $63.4 Mil.
Revenue was 91.786 + 114.244 + 153.116 + 175.497 = $534.6 Mil.
Gross Profit was 18.87 + 60.106 + 79.166 + 94.631 = $252.8 Mil.
Total Current Assets was $294.2 Mil.
Total Assets was $1,259.8 Mil.
Property, Plant and Equipment(Net PPE) was $875.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $58.3 Mil.
Selling, General & Admin. Expense(SGA) was $54.5 Mil.
Total Current Liabilities was $127.8 Mil.
Long-Term Debt was $1,986.4 Mil.
Net Income was -58.833 + -31.779 + 10.577 + 242.523 = $162.5 Mil.
Non Operating Income was -4.332 + -7.551 + -4.151 + 313.24 = $297.2 Mil.
Cash Flow from Operations was -19.984 + 29.403 + -2.997 + -63.712 = $-57.3 Mil.
Accounts Receivable was $57.4 Mil.
Revenue was 118.703 + 223.966 + 118.188 + 194.018 = $654.9 Mil.
Gross Profit was 31.982 + 163.081 + 26.6 + 113.269 = $334.9 Mil.
Total Current Assets was $147.7 Mil.
Total Assets was $1,309.2 Mil.
Property, Plant and Equipment(Net PPE) was $1,027.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $127.4 Mil.
Selling, General & Admin. Expense(SGA) was $72.8 Mil.
Total Current Liabilities was $124.2 Mil.
Long-Term Debt was $2,108.3 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)
=(63.426 / 534.643) / (57.419 / 654.875)
=0.11863243 / 0.08767933
=1.353

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)
=(60.106 / 654.875) / (18.87 / 534.643)
=0.51144417 / 0.47278838
=1.0818

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 - (294.246 + 875.118) / 1259.827) / (1 - (147.716 + 1027.532) / 1309.209)
=0.07180589 / 0.10232209
=0.7018

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
=534.643 / 654.875
=0.8164

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))
=(127.441 / (127.441 + 1027.532)) / (58.311 / (58.311 + 875.118))
=0.11034111 / 0.06246967
=1.7663

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)
=(54.463 / 534.643) / (72.765 / 654.875)
=0.10186798 / 0.11111281
=0.9168

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)
=((1986.378 + 127.828) / 1259.827) / ((2108.319 + 124.243) / 1309.209)
=1.67817169 / 1.70527548
=0.9841

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
=(162.488 - 297.206 - -57.29) / 1259.827
=-0.0615

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 -2.58 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 1.13651.15860.79950.82021.11330.42760.8921.4790.8961.1543
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 -2.41-2.11-2.670.39-3.10-3.52-2.71-2.30-11.86-1.53

Quicksilver Resources Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.4790.83010.99091.50410.8961.26490.9270.85761.15431.353
GMI 1.25141.21471.2151.3161.09171.13111.09550.86331.14781.0818
AQI 0.99921.2022.88681.36961.79051.86930.98761.44980.79860.7018
SGI 1.01650.98470.90580.73730.75140.72420.74880.94790.7920.8164
DEPI 1.0331.02590.7880.71650.44640.55370.81831.07632.02331.7663
SGAI 0.97731.04561.19621.23031.26591.25151.14730.93440.92250.9168
LVGI 0.89010.85711.16611.50762.8833.0432.05521.63150.96030.9841
TATA -0.0937-0.1346-0.4054-0.8409-1.8541-1.8087-1.0799-0.4963-0.0608-0.0615
M-score -2.29-3.04-3.71-6.11-11.83-11.29-8.17-5.06-2.67-2.58
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