KFIC Invest Co (KUW:KFIC) Beneish M-Score : -3.48 (As of Jun. 18, 2024)

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What is KFIC Invest Co Beneish M-Score?

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.

Good Sign:

Beneish M-Score -3.48 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for KFIC Invest Co's Beneish M-Score or its related term are showing as below:

KUW:KFIC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.86 Med: -2.6 Max: -0.31
Current: -3.48

During the past 13 years, the highest Beneish M-Score of KFIC Invest Co was -0.31. The lowest was -3.86. And the median was -2.60.

KFIC Invest Co 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 KFIC Invest Co 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 * 1

0.528 * 1

0.404 * 0.9998

0.892 * 1.0938

0.115 * 0.7222

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9515

4.679 * -0.226555

0.327 * 0.9893

-3.48

* 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 (Mar24) TTM:

Last Year (Mar23) TTM:

Total Receivables was KWD0.00 Mil.
Revenue was 1.282 + 0.57 + 1.056 + 0.999 = KWD3.91 Mil.
Gross Profit was 1.282 + 0.57 + 1.056 + 0.999 = KWD3.91 Mil.
Total Current Assets was KWD0.00 Mil.
Total Assets was KWD40.65 Mil.
Property, Plant and Equipment(Net PPE) was KWD1.18 Mil.
Depreciation, Depletion and Amortization(DDA) was KWD0.44 Mil.
Selling, General, & Admin. Expense(SGA) was KWD1.10 Mil.
Total Current Liabilities was KWD0.00 Mil.
Long-Term Debt & Capital Lease Obligation was KWD5.67 Mil.
Net Income was -0.001 + -10.003 + -0.083 + -0.799 = KWD-10.89 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = KWD0.00 Mil.
Cash Flow from Operations was 0.879 + 1.457 + -2.182 + -1.831 = KWD-1.68 Mil.

Total Receivables was KWD0.00 Mil.
Revenue was 0.73 + 1.192 + 0.775 + 0.875 = KWD3.57 Mil.
Gross Profit was 0.73 + 1.192 + 0.775 + 0.875 = KWD3.57 Mil.
Total Current Assets was KWD0.00 Mil.
Total Assets was KWD54.70 Mil.
Property, Plant and Equipment(Net PPE) was KWD1.58 Mil.
Depreciation, Depletion and Amortization(DDA) was KWD0.38 Mil.
Selling, General, & Admin. Expense(SGA) was KWD1.06 Mil.
Total Current Liabilities was KWD0.00 Mil.
Long-Term Debt & Capital Lease Obligation was KWD7.71 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)
	=	(0 / 3.907)	/	(0 / 3.572)
	=	0	/	0
	=	1

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)
	=	(3.572 / 3.572)	/	(3.907 / 3.907)
	=	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 - (0 + 1.178) / 40.648)	/	(1 - (0 + 1.576) / 54.695)
	=	0.971019	/	0.971186
	=	0.9998

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
	=	3.907	/	3.572
	=	1.0938

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))
	=	(0.382 / (0.382 + 1.576))	/	(0.436 / (0.436 + 1.178))
	=	0.195097	/	0.270136
	=	0.7222

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)
	=	(1.098 / 3.907)	/	(1.055 / 3.572)
	=	0.281034	/	0.295353
	=	0.9515

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)
	=	((5.667 + 0) / 40.648)	/	((7.708 + 0) / 54.695)
	=	0.139416	/	0.140927
	=	0.9893

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
	=	(-10.886 - 0	-	-1.677)	/	40.648
	=	-0.226555

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.

KFIC Invest Co has a M-score of -3.48 suggests that the company is unlikely to be a manipulator.

KFIC Invest Co Beneish M-Score Related Terms

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KFIC Invest Co (KUW:KFIC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Diversified Financial Services » KFIC Invest Co (KUW:KFIC) » Definitions » Beneish M-Score

Traded in Other Exchanges

N/A

Address

AL Ma'arri Street, Khaled Tower, Floor 10, AL Qibla-Block 1, Kuwait, KWT, 13037

Website

https://www.kfic-kw.com

KFIC Invest Co provides diversified financial services to individuals and corporate entities in Kuwait. It operates through four segments: Finance, which provides consumer loans to individuals, and commercial loans to corporate entities and individual customers; Asset Management, which provides services of portfolio management and custody services for clients, as well as management of mutual funds; Investment and Corporate Finance segment monitors the Parent Company's direct investments and also provides investment banking services as well as financial consultancy services for clients; and Financial Brokerage and Online Trading.