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Finisar Corp (NAS:FNSR)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Finisar Corp has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

FNSR' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 3

2
8

During the past 13 years, the highest Piotroski F-Score of Finisar Corp was 8. The lowest was 2. And the median was 5.


Definition

How is the Piotroski F-Score calculated?

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

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Net Income was 7.327 + 3.393 + 6.644 + 12.084 = $29 Mil.
Cash Flow from Operations was 39.104 + 34.598 + 62.734 + 31.665 = $168 Mil.
Revenue was 320.042 + 314.03 + 321.136 + 309.206 = $1,264 Mil.
Gross Profit was 89.218 + 87.377 + 89.091 + 87.74 = $353 Mil.
Average Total Assets from the begining of this year (Jan15)
to the end of this year (Jan16) was
(1521.356 + 1551.882 + 1567.86 + 1577.254 + 1597.728) / 5 = $1563.216 Mil.
Total Assets at the begining of this year (Jan15) was $1,521 Mil.
Long-Term Debt was $229 Mil.
Total Current Assets was $1,102 Mil.
Total Current Liabilities was $222 Mil.
Net Income was 28.75 + 14.243 + -11.362 + 1.679 = $33 Mil.

Revenue was 306.025 + 327.638 + 296.981 + 306.283 = $1,237 Mil.
Gross Profit was 96.564 + 98.819 + 84.92 + 77.953 = $358 Mil.
Average Total Assets from the begining of last year (Jan14)
to the end of last year (Jan15) was
(1427.786 + 1497.546 + 1543.652 + 1518.227 + 1521.356) / 5 = $1501.7134 Mil.
Total Assets at the begining of last year (Jan14) was $1,428 Mil.
Long-Term Debt was $219 Mil.
Total Current Assets was $1,056 Mil.
Total Current Liabilities was $198 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Finisar Corp's current net income (TTM) was 29. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Finisar Corp's current cash flow from operations (TTM) was 168. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Jan15)
=29.448/1521.356
=0.01935642

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan14)
=33.31/1427.786
=0.02332983

Finisar Corp's return on assets of this year was 0.01935642. Finisar Corp's return on assets of last year was 0.02332983. ==> Last year is higher ==> Score 0.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Finisar Corp's current net income (TTM) was 29. Finisar Corp's current cash flow from operations (TTM) was 168. ==> 168 > 29 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jan16)=Long-Term Debt/Average Total Assets from Jan15 to Jan16
=228.561/1563.216
=0.14621204

Gearing (Last Year: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=219.072/1501.7134
=0.14588136

Finisar Corp's gearing of this year was 0.14621204. Finisar Corp's gearing of last year was 0.14588136. ==> Last year is lower than this year ==> Score 0.

Question 6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Jan16)=Total Current Assets/Total Current Liabilities
=1102.28/221.573
=4.97479386

Current Ratio (Last Year: Jan15)=Total Current Assets/Total Current Liabilities
=1055.647/197.796
=5.33704928

Finisar Corp's current ratio of this year was 4.97479386. Finisar Corp's current ratio of last year was 5.33704928. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Finisar Corp's number of shares in issue this year was 108.1. Finisar Corp's number of shares in issue last year was 106. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=353.426/1264.414
=0.27951763

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=358.256/1236.927
=0.28963391

Finisar Corp's gross margin of this year was 0.27951763. Finisar Corp's gross margin of last year was 0.28963391. ==> Last year's gross margin is higher ==> Score 0.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Total Assets at the Beginning of This Year (Jan15)
=1264.414/1521.356
=0.83110988

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan14)
=1236.927/1427.786
=0.86632521

Finisar Corp's asset turnover of this year was 0.83110988. Finisar Corp's asset turnover of last year was 0.86632521. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+1+0+0+0+0+0
=3

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Finisar Corp has an F-score of 3. It is a bad or low score, which usually implies poor business operation.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

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

Finisar Corp Annual Data

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
Question 1 0000111011
Question 2 0111111111
Question 3 1000110010
Question 4 1111011101
Question 5 1110111101
Question 6 1001110001
Question 7 0000000100
Question 8 1100010010
Question 9 1101100010
F-score 6534674455

Finisar Corp Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
Question 1 1111111111
Question 2 1111111111
Question 3 1111000000
Question 4 1101111111
Question 5 1000011110
Question 6 0000111110
Question 7 0000100000
Question 8 1111000000
Question 9 1111100000
F-score 7656655553
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