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F5 Networks Inc (NAS:FFIV)
Beneish M-Score
-2.90 (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 -2.90 suggests that the company is not a manipulator.

FFIV' s 10-Year Beneish M-Score Range
Min: -4.04   Max: -0.46
Current: -2.9

-4.04
-0.46

During the past 13 years, the highest Beneish M-Score of F5 Networks Inc was -0.46. The lowest was -4.04. And the median was -2.77.


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 * 1.0327+0.528 * 1.0069+0.404 * 0.9224+0.892 * 1.1474+0.115 * 0.9283
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9636+4.679 * -0.1084-0.327 * 1.1387
=-2.90

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $243 Mil.
Revenue was 440.285 + 420.043 + 406.452 + 395.329 = $1,662 Mil.
Gross Profit was 360.823 + 344.381 + 333.569 + 328.386 = $1,367 Mil.
Total Current Assets was $945 Mil.
Total Assets was $2,175 Mil.
Property, Plant and Equipment(Net PPE) was $63 Mil.
Depreciation, Depletion and Amortization(DDA) was $44 Mil.
Selling, General & Admin. Expense(SGA) was $641 Mil.
Total Current Liabilities was $611 Mil.
Long-Term Debt was $0 Mil.
Net Income was 79.473 + 69.641 + 68.048 + 76.231 = $293 Mil.
Non Operating Income was 1.193 + 0.023 + 0.246 + 0.732 = $2 Mil.
Cash Flow from Operations was 138.234 + 81.967 + 158.926 + 147.995 = $527 Mil.
Accounts Receivable was $205 Mil.
Revenue was 370.302 + 350.232 + 365.451 + 362.559 = $1,449 Mil.
Gross Profit was 305.385 + 289.93 + 304.566 + 299.878 = $1,200 Mil.
Total Current Assets was $834 Mil.
Total Assets was $2,148 Mil.
Property, Plant and Equipment(Net PPE) was $64 Mil.
Depreciation, Depletion and Amortization(DDA) was $40 Mil.
Selling, General & Admin. Expense(SGA) was $579 Mil.
Total Current Liabilities was $530 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)
=(243.072 / 1662.109) / (205.138 / 1448.544)
=0.14624312 / 0.14161669
=1.0327

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)
=(344.381 / 1448.544) / (360.823 / 1662.109)
=0.82825168 / 0.82254473
=1.0069

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 - (945.123 + 62.65) / 2175.485) / (1 - (834.309 + 63.72) / 2147.803)
=0.53675939 / 0.58188484
=0.9224

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
=1662.109 / 1448.544
=1.1474

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))
=(39.857 / (39.857 + 63.72)) / (44.355 / (44.355 + 62.65))
=0.38480551 / 0.41451334
=0.9283

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)
=(640.654 / 1662.109) / (579.407 / 1448.544)
=0.38544644 / 0.39999268
=0.9636

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 + 611.22) / 2175.485) / ((0 + 529.948) / 2147.803)
=0.28095804 / 0.24673958
=1.1387

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
=(293.393 - 2.194 - 527.122) / 2175.485
=-0.1084

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 -2.90 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 own currency.

F5 Networks Inc Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 0.7941.11931.07461.09630.8551.09730.77621.13130.93471.0253
GMI 0.99741.00190.98981.00181.00530.98640.97070.98250.9890.9992
AQI 1.05170.86980.76851.70331.09540.86771.00960.91031.16621.076
SGI 1.47711.64381.40031.3341.23691.00451.35051.3061.19571.0756
DEPI 1.10631.04481.06160.91240.92120.82670.97681.35540.81750.9598
SGAI 0.84910.85361.03131.01161.05440.95230.95510.96160.98931.0129
LVGI 0.53080.97471.08631.18951.22441.04921.00991.12621.02731.0137
TATA -0.0194-0.0858-0.1053-0.128-0.1473-0.1125-0.1249-0.1183-0.1183-0.103
M-score -2.12-2.21-2.67-2.48-3.14-3.00-2.97-2.68-2.89-2.85

F5 Networks Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.04791.02790.93470.94450.92790.97181.02530.98521.04171.0327
GMI 0.98740.98830.9890.99030.99490.9990.99921.0051.00671.0069
AQI 1.03631.1481.16621.16971.06291.06861.0760.99610.91860.9224
SGI 1.2291.21791.19571.17831.1291.08971.07561.07191.11271.1474
DEPI 1.14270.94650.81750.76550.83940.92840.95980.96790.94780.9283
SGAI 0.98810.99040.98930.99481.00691.02281.01291.00410.98210.9636
LVGI 1.10981.1121.02731.02021.02151.01541.01371.06661.09491.1387
TATA -0.1138-0.1101-0.1183-0.1157-0.1069-0.1112-0.103-0.1101-0.1094-0.1084
M-score -2.77-2.76-2.89-2.88-2.94-2.94-2.85-2.97-2.92-2.90
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