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F5 Networks Inc (NAS:FFIV)
Beneish M-Score
-2.95 (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 -2.95 suggests that the company is not a manipulator.

FFIV' s 10-Year Beneish M-Score Range
Min: -4.04   Max: -0.46
Current: -2.95

-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 -2.79.


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 * 0.9865+0.528 * 1.0034+0.404 * 0.8831+0.892 * 1.1748+0.115 * 0.9595
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9745+4.679 * -0.112-0.327 * 1.1221
=-2.95

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $256 Mil.
Revenue was 462.793 + 465.266 + 440.285 + 420.043 = $1,788 Mil.
Gross Profit was 383.445 + 383.314 + 360.823 + 344.381 = $1,472 Mil.
Total Current Assets was $1,027 Mil.
Total Assets was $2,236 Mil.
Property, Plant and Equipment(Net PPE) was $67 Mil.
Depreciation, Depletion and Amortization(DDA) was $48 Mil.
Selling, General & Admin. Expense(SGA) was $686 Mil.
Total Current Liabilities was $696 Mil.
Long-Term Debt was $0 Mil.
Net Income was 89.076 + 94.021 + 79.473 + 69.641 = $332 Mil.
Non Operating Income was 2.594 + 2.323 + 1.193 + 0.023 = $6 Mil.
Cash Flow from Operations was 186.395 + 169.865 + 138.234 + 81.967 = $576 Mil.
Accounts Receivable was $221 Mil.
Revenue was 406.452 + 395.329 + 370.302 + 350.232 = $1,522 Mil.
Gross Profit was 333.569 + 328.386 + 305.385 + 289.93 = $1,257 Mil.
Total Current Assets was $871 Mil.
Total Assets was $2,215 Mil.
Property, Plant and Equipment(Net PPE) was $62 Mil.
Depreciation, Depletion and Amortization(DDA) was $42 Mil.
Selling, General & Admin. Expense(SGA) was $599 Mil.
Total Current Liabilities was $614 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)
=(255.864 / 1788.387) / (220.784 / 1522.315)
=0.1430697 / 0.14503174
=0.9865

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)
=(383.314 / 1522.315) / (383.445 / 1788.387)
=0.82589346 / 0.82306738
=1.0034

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 - (1026.857 + 66.636) / 2236.424) / (1 - (870.943 + 62.157) / 2214.839)
=0.51105291 / 0.57870527
=0.8831

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
=1788.387 / 1522.315
=1.1748

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))
=(41.508 / (41.508 + 62.157)) / (47.726 / (47.726 + 66.636))
=0.40040515 / 0.41732394
=0.9595

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)
=(685.505 / 1788.387) / (598.804 / 1522.315)
=0.38330909 / 0.39335092
=0.9745

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 + 695.624) / 2236.424) / ((0 + 613.971) / 2214.839)
=0.31104299 / 0.27720796
=1.1221

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
=(332.211 - 6.133 - 576.461) / 2236.424
=-0.112

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 -2.95 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

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 1.11931.07461.09630.8551.09730.77621.13130.93471.02531.0145
GMI 1.00190.98981.00181.00530.98640.97070.98250.9890.99921.0099
AQI 0.86980.76851.70331.09540.86771.00960.91031.16621.0760.846
SGI 1.64381.40031.3341.23691.00451.35051.3061.19571.07561.1693
DEPI 1.04481.06160.91240.92120.82670.97681.35540.81750.95980.946
SGAI 0.85361.03131.01161.05440.95230.95510.96160.98931.01290.9711
LVGI 0.97471.08631.18951.22441.04921.00991.12621.02731.01371.1794
TATA -0.0858-0.1053-0.128-0.1473-0.1125-0.1249-0.1183-0.1183-0.103-0.1106
M-score -2.21-2.67-2.48-3.14-3.00-2.97-2.68-2.89-2.85-2.95

F5 Networks Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.94450.92790.97181.02530.98521.04171.03271.01450.98651.0166
GMI 0.99030.99490.9990.99921.0051.00671.00691.00991.00340.9995
AQI 1.16971.06291.06861.0760.99610.91860.92240.8460.88310.9298
SGI 1.17831.1291.08971.07561.07191.11271.14741.16931.17481.156
DEPI 0.76550.83940.92840.95980.96790.94780.92830.9460.95950.9766
SGAI 0.99481.00691.02281.01291.00410.98210.96360.97110.97450.9784
LVGI 1.02021.02151.01541.01371.06661.09491.13871.17941.12211.1381
TATA -0.1157-0.1069-0.1112-0.103-0.1101-0.1094-0.1084-0.1106-0.112-0.1341
M-score -2.88-2.94-2.94-2.85-2.97-2.92-2.90-2.95-2.95-3.03
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