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F5 Networks Inc (NAS:FFIV)
Beneish M-Score
-3.30 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

F5 Networks Inc has a M-score of -3.30 suggests that the company is not a manipulator.

FFIV' s Beneish M-Score Range Over the Past 10 Years
Min: -3.6   Max: -0.46
Current: -3.3

-3.6
-0.46

During the past 13 years, the highest Beneish M-Score of F5 Networks Inc was -0.46. The lowest was -3.60. And the median was -2.92.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 F5 Networks Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9235+0.528 * 0.9951+0.404 * 0.872+0.892 * 1.0392+0.115 * 1.1228
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0002+4.679 * -0.151-0.327 * 1.1209
=-3.30

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $268 Mil.
Revenue was 525.349 + 496.522 + 483.677 + 489.486 = $1,995 Mil.
Gross Profit was 440.4 + 412.179 + 401.447 + 403.803 = $1,658 Mil.
Total Current Assets was $1,289 Mil.
Total Assets was $2,306 Mil.
Property, Plant and Equipment(Net PPE) was $123 Mil.
Depreciation, Depletion and Amortization(DDA) was $57 Mil.
Selling, General & Admin. Expense(SGA) was $767 Mil.
Total Current Liabilities was $844 Mil.
Long-Term Debt was $0 Mil.
Net Income was 108.935 + 91.789 + 75.415 + 89.716 = $366 Mil.
Non Operating Income was 0.268 + 0.978 + 0.133 + 1.135 = $3 Mil.
Cash Flow from Operations was 204.07 + 170.476 + 133.118 + 203.871 = $712 Mil.
Accounts Receivable was $279 Mil.
Revenue was 501.301 + 483.586 + 472.143 + 462.793 = $1,920 Mil.
Gross Profit was 416.643 + 397.927 + 389.547 + 383.445 = $1,588 Mil.
Total Current Assets was $1,188 Mil.
Total Assets was $2,312 Mil.
Property, Plant and Equipment(Net PPE) was $96 Mil.
Depreciation, Depletion and Amortization(DDA) was $53 Mil.
Selling, General & Admin. Expense(SGA) was $738 Mil.
Total Current Liabilities was $755 Mil.
Long-Term Debt was $0 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in 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)
=(268.175 / 1995.034) / (279.434 / 1919.823)
=0.13442127 / 0.14555196
=0.9235

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)
=(1587.562 / 1919.823) / (1657.829 / 1995.034)
=0.82693144 / 0.83097782
=0.9951

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (1288.801 + 123.248) / 2306.323) / (1 - (1188.14 + 95.909) / 2312.29)
=0.38774881 / 0.44468514
=0.872

4. SGI = Sales Growth Index

Ratio of sales 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
=1995.034 / 1919.823
=1.0392

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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))
=(52.583 / (52.583 + 95.909)) / (56.776 / (56.776 + 123.248))
=0.35411335 / 0.31538017
=1.1228

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses 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)
=(767.174 / 1995.034) / (738.08 / 1919.823)
=0.38454182 / 0.38445211
=1.0002

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$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((0 + 844.238) / 2306.323) / ((0 + 755.123) / 2312.29)
=0.36605367 / 0.32656933
=1.1209

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
=(365.855 - 2.514 - 711.535) / 2306.323
=-0.151

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

F5 Networks Inc has a M-score of -3.30 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

F5 Networks Inc Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
DSRI 1.09630.8551.09730.77621.13130.93471.02531.01451.04070.9235
GMI 1.00181.00530.98640.97070.98250.9890.99921.00990.99290.9951
AQI 1.70331.09540.86771.00960.91031.16621.0760.8460.8680.872
SGI 1.3341.23691.00451.35051.3061.19571.07561.16931.10841.0392
DEPI 0.91240.92120.82670.97681.35540.81750.95980.9461.15351.1228
SGAI 1.01161.05440.95230.95510.96160.98931.01290.97111.00171.0002
LVGI 1.18951.22441.04921.00991.12621.02731.01371.17941.12021.1209
TATA -0.128-0.1473-0.1125-0.1249-0.1183-0.1183-0.103-0.1106-0.1418-0.151
M-score -2.48-3.14-3.00-2.97-2.68-2.89-2.85-2.95-3.09-3.30

F5 Networks Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.03271.01450.98651.01660.94761.04071.00240.95270.96370.9235
GMI 1.00691.00991.00340.99950.9970.99290.99640.99640.99520.9951
AQI 0.92240.8460.88310.92980.8180.8680.85160.84680.94050.872
SGI 1.14741.16931.17481.1561.13341.10841.08841.06391.04631.0392
DEPI 0.92830.9460.95950.97661.08941.15351.19981.25251.16781.1228
SGAI 0.96360.97110.97450.97840.98771.00171.00351.01561.01981.0002
LVGI 1.13871.17941.12211.13811.12871.12021.11411.13651.11851.1209
TATA -0.1084-0.1106-0.112-0.1341-0.1405-0.1418-0.1482-0.1522-0.1513-0.151
M-score -2.90-2.95-2.95-3.03-3.17-3.09-3.17-3.26-3.23-3.30
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