Kingsway Financial Services (Kingsway Financial Services) Beneish M-Score

: -1.12 (As of Today)

View and export this data going back to 1998. Start your Free Trial

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Warning Sign:

Beneish M-Score -1.12 higher than -1.78, which implies that the company might have manipulated its financial results.

The historical rank and industry rank for Kingsway Financial Services's Beneish M-Score or its related term are showing as below:

KFS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.24 Med: -2.46 Max: -1.12
Current: -1.12

During the past 13 years, the highest Beneish M-Score of Kingsway Financial Services was -1.12. The lowest was -3.24. And the median was -2.46.

Kingsway Financial Services Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Kingsway Financial Services for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.9198

0.528 * 1

0.404 * 1.4419

0.892 * 0.9387

0.115 * 1.1417

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 1.0325

4.679 * 0.251597

0.327 * 0.6321

-1.12

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Dec23) TTM:

Last Year (Dec22) TTM:

Total Receivables was $12.1 Mil.
Revenue was 26.438 + 25.876 + 28.261 + 27.08 = $107.7 Mil.
Gross Profit was 26.438 + 25.876 + 28.261 + 27.08 = $107.7 Mil.
Total Current Assets was $27.3 Mil.
Total Assets was $197.7 Mil.
Property, Plant and Equipment(Net PPE) was $2.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.2 Mil.
Selling, General, & Admin. Expense(SGA) was $42.2 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt & Capital Lease Obligation was $45.6 Mil.
Net Income was -1.817 + -1.026 + -1.44 + 27.842 = $23.6 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was -17.052 + -0.835 + -1.636 + -6.663 = $-26.2 Mil.

Total Receivables was $14.0 Mil.
Revenue was 29.011 + 38.649 + 24.145 + 22.884 = $114.7 Mil.
Gross Profit was 29.011 + 38.649 + 24.145 + 22.884 = $114.7 Mil.
Total Current Assets was $115.9 Mil.
Total Assets was $285.7 Mil.
Property, Plant and Equipment(Net PPE) was $1.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $6.4 Mil.
Selling, General, & Admin. Expense(SGA) was $43.5 Mil.
Total Current Liabilities was $0.9 Mil.
Long-Term Debt & Capital Lease Obligation was $103.3 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(12.108 / 107.655)	/	(14.024 / 114.689)
	=	0.11247	/	0.122279
	=	0.9198

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)
	=	(114.689 / 114.689)	/	(107.655 / 107.655)
	=	1	/	1
	=	1

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (27.289 + 2.736) / 197.717)	/	(1 - (115.94 + 1.684) / 285.65)
	=	0.848142	/	0.588223
	=	1.4419

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	107.655	/	114.689
	=	0.9387

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(6.449 / (6.449 + 1.684))	/	(6.22 / (6.22 + 2.736))
	=	0.792942	/	0.694506
	=	1.1417

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(42.179 / 107.655)	/	(43.519 / 114.689)
	=	0.391798	/	0.379452
	=	1.0325

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((45.614 + 0) / 197.717)	/	((103.309 + 0.945) / 285.65)
	=	0.230703	/	0.364971
	=	0.6321

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
	=	(23.559 - 0	-	-26.186)	/	197.717
	=	0.251597

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Kingsway Financial Services has a M-score of -1.12 signals that the company is likely to be a manipulator.

Kingsway Financial Services Beneish M-Score Related Terms

Thank you for viewing the detailed overview of Kingsway Financial Services's Beneish M-Score provided by GuruFocus.com. Please click on the following links to see related term pages.

Kingsway Financial Services (Kingsway Financial Services) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Kingsway Financial Services Inc (NYSE:KFS) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

N/A

Address

10 S. Riverside Plaza, Suite 1520, Chicago, IL, USA, 60606

Website

https://www.kingsway-financial.com

Kingsway Financial Services Inc through subsidiaries operates in the extended warranty, asset management, and real estate industries in the United States. It operates through three segments: Extended Warranty and Kingsway Search Xcelerator. The Extended Warranty segment provides after-market vehicle protection services distributed by credit unions. The firm generates maximum revenue from Extended Warranty segment in the form of Service fee and commission income.

Executives

Fitzgerald John Taylor Maloney	director, officer: Executive Vice President	KINGSWAY FINANCIAL SERVICES INC., 150 PIERCE ROAD, SUITE 600, ITASCA IL 60143
Kent A Hansen	officer: CFO & EVP	C/O KINGSWAY FINANCIAL SERVICES INC., 150 PIERCE ROAD, SUITE 600, ITASCA IL 60143
Charles L Frischer	director	3156 EAST LAURELHURST DRIVE, NE, SEATTLE WA 98105
Oakmont Capital Inc	10 percent owner	112 ST.CLAIR AVENUE WEST, SUITE 400, ONTARIO Z4 M4V 2Y3
Gregory Paul Hannon	director	OAKMONT CAPITAL INC., 45 ST. CLAIR AVENUE WEST, SUITE 400, TORONTO A6 M4V 1K9
Terence Michael Kavanagh	director	OAKMONT CAPITAL INC., 45 ST. CLAIR AVENUE WEST, SUITE 400, TORONTO A6 M4V 1K9
Joseph Stilwell	director, 10 percent owner	111 BROADWAY, 12TH FLOOR, NEW YORK NY 10006
Paul R. Hogan	officer: Secretary and General Counsel	150 PIERCE ROAD, SUITE 600, ITASCA IL 60143
Porcelli Corissa B.	director	150 PIERCE ROAD, SUITE 600, ITASCA IL 60143
Stilwell Associates L P	10 percent owner	111 BROADWAY, 12TH FLOOR, NEW YORK NY 10006
Stilwell Activist Investments, L.p.	10 percent owner	111 BROADWAY, 12TH FLOOR, NEW YORK NY 10006
Stilwell Activist Fund, L.p.	10 percent owner	111 BROADWAY, 12TH FLOOR, NEW YORK NY 10006
Stilwell Value Partners Vii, L.p.	10 percent owner	111 BROADWAY, 12TH FLOOR, NEW YORK NY 10006
Hickey William August Jr	officer: Executive VP, COO and CFO	KINGSWAY FINANCIAL SERVICES, INC., 150 PIERCE ROAD, SUITE 600, ITASCA IL 60143
Douglas Levine	director	2602 NW 5TH AVENUE, MIAMI FL 33127