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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 = 8 or 9
Bad or low score = 0 or 1

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 (Jul14) TTM:Last Year (Jul13) TTM:
Net Income was 29.965 + 27.061 + 28.75 + 14.243 = $100 Mil.
Cash Flow from Operations was 49.598 + 14.585 + 14.201 + 26.014 = $104 Mil.
Revenue was 290.722 + 294.018 + 306.025 + 327.638 = $1,218 Mil.
Gross Profit was 103.373 + 105.689 + 96.564 + 98.819 = $404 Mil.
Average Total Assets from the begining of this year (Jul13)
to the end of this year (Jul14) was
(1065.315 + 1145.384 + 1427.786 + 1497.546 + 1543.652) / 5 = $1,336 Mil.
Total Assets was $1,544 Mil.
Long-Term Debt was $214 Mil.
Total Current Assets was $1,079 Mil.
Total Current Liabilities was $256 Mil.
Net Income was 0.271 + -3.407 + 3.879 + 26.011 = $27 Mil.

Revenue was 232.041 + 238.351 + 243.417 + 266.068 = $980 Mil.
Gross Profit was 63.874 + 68.044 + 67.326 + 91.373 = $291 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Jul13) was
(962.577 + 988.187 + 994.757 + 1007.847 + 1065.315) / 5 = $1,004 Mil.
Total Assets was $1,065 Mil.
Long-Term Debt was $40 Mil.
Total Current Assets was $721 Mil.
Total Current Liabilities was $167 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Finisar Corp's current net income (ttm) was 100. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Finisar Corp's current cash flow from operations (ttm) was 104. ==> Positive ==> Score 1.

Q3. 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)/Average Total Assets from Jul13 to Jul14
=100.019/1335.9366
=0.07486807

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jul12 to Jul13
=26.754/1003.7366
=0.0266544

Finisar Corp's return on assets of this year was 0.07486807. Finisar Corp's return on assets of last year was 0.0266544. ==> This year is higher. ==> Score 1.

Q4. 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 100. Finisar Corp's current cash flow from operations (ttm) was 104. ==> 104 > 100 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

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

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

Gearing (This Year: Jul14)=Long-Term Debt/Total Assets
=214.496/1543.652
=0.1389536

Gearing (Last Year: Jul13)=Long-Term Debt/Total Assets
=40.015/1065.315
=0.03756166

Finisar Corp's gearing of this year was 0.1389536. Finisar Corp's gearing of last year was 0.03756166. ==> Last year is lower than this year ==> Score 0.

Q6. 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: Jul14)=Total Current Assets/Total Current Liabilities
=1078.993/256.141
=4.21249624

Current Ratio (Last Year: Jul13)=Total Current Assets/Total Current Liabilities
=721.204/166.613
=4.32861781

Finisar Corp's current ratio of this year was 4.21249624. Finisar Corp's current ratio of last year was 4.32861781. ==> Last year's current ratio is higher ==> Score 0.

Q7. 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 102.3. Finisar Corp's number of shares in issue last year was 101.1. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Q8. 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
=404.445/1218.403
=0.33194682

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=290.617/979.877
=0.29658518

Finisar Corp's gross margin of this year was 0.33194682. Finisar Corp's gross margin of last year was 0.29658518. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout 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)/Average Total Assets from Jul13 to Jul14
=1218.403/1335.9366
=0.91202157

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jul12 to Jul13
=979.877/1003.7366
=0.97622922

Finisar Corp's asset turnover of this year was 0.91202157. Finisar Corp's asset turnover of last year was 0.97622922. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+0+0+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

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, Altman Z-Score, Beneish M-Score


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
Q1 0000011101
Q2 0011111111
Q3 1100011001
Q4 1111101110
Q5 0111011110
Q6 0100111000
Q7 0000000010
Q8 1110011001
Q9 1111111111
F-score 4654478555

Finisar Corp Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 1111011111
Q2 1111111111
Q3 0000001111
Q4 1111111101
Q5 1111111000
Q6 0111000000
Q7 1101100000
Q8 0000011111
Q9 0000001100
F-score 5656457645
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