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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 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 5

1
8

During the past 13 years, the highest Piotroski F-Score of Finisar Corp was 8. The lowest was 1. 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 (Jan15) TTM:Last Year (Jan14) TTM:
Net Income was 28.75 + 14.243 + -11.362 + 1.679 = $33 Mil.
Cash Flow from Operations was 14.201 + 26.014 + 8.861 + 39.618 = $89 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 this year (Jan14)
to the end of this year (Jan15) was
(1427.786 + 1497.546 + 1543.652 + 1518.227 + 1521.356) / 5 = $1501.7134 Mil.
Total Assets at the begining of this 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.
Net Income was 3.879 + 26.011 + 29.965 + 27.061 = $87 Mil.

Revenue was 243.417 + 266.068 + 290.722 + 294.018 = $1,094 Mil.
Gross Profit was 67.326 + 91.373 + 103.373 + 105.689 = $368 Mil.
Average Total Assets from the begining of last year (Jan13)
to the end of last year (Jan14) was
(994.757 + 1007.847 + 1065.315 + 1145.384 + 1427.786) / 5 = $1128.2178 Mil.
Total Assets at the begining of last year (Jan13) was $995 Mil.
Long-Term Debt was $210 Mil.
Total Current Assets was $1,044 Mil.
Total Current Liabilities was $229 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 33. ==> 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 89. ==> 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 (Jan14)
=33.31/1427.786
=0.02332983

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=86.916/994.757
=0.0873741

Finisar Corp's return on assets of this year was 0.02332983. Finisar Corp's return on assets of last year was 0.0873741. ==> 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 33. Finisar Corp's current cash flow from operations (TTM) was 89. ==> 89 > 33 ==> 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: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=219.072/1501.7134
=0.14588136

Gearing (Last Year: Jan14)=Long-Term Debt/Average Total Assets from Jan13 to Jan14
=210.029/1128.2178
=0.18615998

Finisar Corp's gearing of this year was 0.14588136. Finisar Corp's gearing of last year was 0.18615998. ==> This year is lower or equal to last year. ==> Score 1.

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: Jan15)=Total Current Assets/Total Current Liabilities
=1055.647/197.796
=5.33704928

Current Ratio (Last Year: Jan14)=Total Current Assets/Total Current Liabilities
=1044.355/229.36
=4.55334409

Finisar Corp's current ratio of this year was 5.33704928. Finisar Corp's current ratio of last year was 4.55334409. ==> This year's current ratio is higher. ==> Score 1.

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 106. Finisar Corp's number of shares in issue last year was 104.4. ==> 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
=358.256/1236.927
=0.28963391

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=367.761/1094.225
=0.33609267

Finisar Corp's gross margin of this year was 0.28963391. Finisar Corp's gross margin of last year was 0.33609267. ==> 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 (Jan14)
=1236.927/1427.786
=0.86632521

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=1094.225/994.757
=1.09999226

Finisar Corp's asset turnover of this year was 0.86632521. Finisar Corp's asset turnover of last year was 1.09999226. ==> 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+1+1+0+0+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

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
Question 1 0000011101
Question 2 0011111111
Question 3 1100011001
Question 4 1111101110
Question 5 0111011110
Question 6 0100111000
Question 7 0000000010
Question 8 1110011001
Question 9 1110110001
F-score 4653477445

Finisar Corp Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
Question 1 1101111111
Question 2 1111111111
Question 3 0000111100
Question 4 1111110111
Question 5 1111100001
Question 6 1100000011
Question 7 0110000010
Question 8 0001111100
Question 9 0001111110
F-score 5646765665
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