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

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 5 indicating the company's financial situation is typical for a stable company.

FNSR' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 7
Current: 5

2
7

During the past 13 years, the highest Piotroski F-Score of Finisar Corp was 7. The lowest was 2. And the median was 4.


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 (Apr16) TTM:Last Year (Apr15) TTM:
Net Income was 3.393 + 6.644 + 12.084 + 13.072 = $35 Mil.
Cash Flow from Operations was 34.598 + 62.734 + 31.665 + 54.603 = $184 Mil.
Revenue was 314.03 + 321.136 + 309.206 + 318.794 = $1,263 Mil.
Gross Profit was 87.377 + 89.091 + 87.74 + 90.442 = $355 Mil.
Average Total Assets from the begining of this year (Apr15)
to the end of this year (Apr16) was
(1551.882 + 1567.86 + 1577.254 + 1597.728 + 1646.989) / 5 = $1588.3426 Mil.
Total Assets at the begining of this year (Apr15) was $1,552 Mil.
Long-Term Debt was $231 Mil.
Total Current Assets was $1,148 Mil.
Total Current Liabilities was $233 Mil.
Net Income was 14.243 + -11.362 + 1.679 + 7.327 = $12 Mil.

Revenue was 327.638 + 296.981 + 306.283 + 320.042 = $1,251 Mil.
Gross Profit was 98.819 + 84.92 + 77.953 + 89.218 = $351 Mil.
Average Total Assets from the begining of last year (Apr14)
to the end of last year (Apr15) was
(1497.546 + 1543.652 + 1518.227 + 1521.356 + 1551.882) / 5 = $1526.5326 Mil.
Total Assets at the begining of last year (Apr14) was $1,498 Mil.
Long-Term Debt was $221 Mil.
Total Current Assets was $1,064 Mil.
Total Current Liabilities was $206 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 35. ==> 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 184. ==> 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 (Apr15)
=35.193/1551.882
=0.02267763

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Apr14)
=11.887/1497.546
=0.00793765

Finisar Corp's return on assets of this year was 0.02267763. Finisar Corp's return on assets of last year was 0.00793765. ==> This year is higher. ==> Score 1.

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 35. Finisar Corp's current cash flow from operations (TTM) was 184. ==> 184 > 35 ==> 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: Apr16)=Long-Term Debt/Average Total Assets from Apr15 to Apr16
=231.011/1588.3426
=0.14544154

Gearing (Last Year: Apr15)=Long-Term Debt/Average Total Assets from Apr14 to Apr15
=221.406/1526.5326
=0.1450385

Finisar Corp's gearing of this year was 0.14544154. Finisar Corp's gearing of last year was 0.1450385. ==> 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: Apr16)=Total Current Assets/Total Current Liabilities
=1148.083/233.41
=4.91873956

Current Ratio (Last Year: Apr15)=Total Current Assets/Total Current Liabilities
=1064.263/205.517
=5.17846699

Finisar Corp's current ratio of this year was 4.91873956. Finisar Corp's current ratio of last year was 5.17846699. ==> 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 108.9. Finisar Corp's number of shares in issue last year was 105. ==> 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
=354.65/1263.166
=0.28076278

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=350.91/1250.944
=0.28051615

Finisar Corp's gross margin of this year was 0.28076278. Finisar Corp's gross margin of last year was 0.28051615. ==> This year's gross margin is higher. ==> Score 1.

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 (Apr15)
=1263.166/1551.882
=0.8139575

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Apr14)
=1250.944/1497.546
=0.83532927

Finisar Corp's asset turnover of this year was 0.8139575. Finisar Corp's asset turnover of last year was 0.83532927. ==> 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+1+1+0+0+0+1+0
=5

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

Finisar Corp has an F-score of 5 indicating the company's financial situation is typical for a stable company.


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

Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15Apr16
Question 1 0001110111
Question 2 1111111111
Question 3 0001100101
Question 4 1110111011
Question 5 1101111010
Question 6 0011100010
Question 7 0000001000
Question 8 1000100101
Question 9 1011000100
F-score 5346744555

Finisar Corp Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
Question 1 1111111111
Question 2 1111111111
Question 3 1110000001
Question 4 1011111111
Question 5 0000111100
Question 6 0001111100
Question 7 0001000000
Question 8 1110000001
Question 9 1111000000
F-score 6566555535
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