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F5 Networks Inc (NAS:FFIV)
Beneish M-Score
-3.17 (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 -3.17 suggests that the company is not a manipulator.

FFIV' s Beneish M-Score Range Over the Past 10 Years
Min: -4.04   Max: -0.46
Current: -3.17

-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 -2.85.


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 * 1.0024+0.528 * 0.9964+0.404 * 0.8516+0.892 * 1.0884+0.115 * 1.1998
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0035+4.679 * -0.1482-0.327 * 1.1141
=-3.17

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $279 Mil.
Revenue was 489.486 + 501.301 + 483.586 + 472.143 = $1,947 Mil.
Gross Profit was 403.803 + 416.643 + 397.927 + 389.547 = $1,608 Mil.
Total Current Assets was $1,208 Mil.
Total Assets was $2,316 Mil.
Property, Plant and Equipment(Net PPE) was $100 Mil.
Depreciation, Depletion and Amortization(DDA) was $53 Mil.
Selling, General & Admin. Expense(SGA) was $749 Mil.
Total Current Liabilities was $803 Mil.
Long-Term Debt was $0 Mil.
Net Income was 89.716 + 97.037 + 93.172 + 85.729 = $366 Mil.
Non Operating Income was 1.135 + 1.865 + 0.72 + 3.266 = $7 Mil.
Cash Flow from Operations was 203.871 + 183.343 + 172.507 + 142.296 = $702 Mil.
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.



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)
=(279.158 / 1946.516) / (255.864 / 1788.387)
=0.14341418 / 0.1430697
=1.0024

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)
=(416.643 / 1788.387) / (403.803 / 1946.516)
=0.82306738 / 0.82605024
=0.9964

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 - (1208.133 + 99.946) / 2316.081) / (1 - (1026.857 + 66.636) / 2236.424)
=0.4352188 / 0.51105291
=0.8516

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
=1946.516 / 1788.387
=1.0884

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))
=(47.726 / (47.726 + 66.636)) / (53.304 / (53.304 + 99.946))
=0.41732394 / 0.34782382
=1.1998

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)
=(748.719 / 1946.516) / (685.505 / 1788.387)
=0.3846457 / 0.38330909
=1.0035

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 + 802.583) / 2316.081) / ((0 + 695.624) / 2236.424)
=0.34652631 / 0.31104299
=1.1141

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
=(365.654 - 6.986 - 702.017) / 2316.081
=-0.1482

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 -3.17 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

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 1.07461.09630.8551.09730.77621.13130.93471.02531.01451.0407
GMI 0.98981.00181.00530.98640.97070.98250.9890.99921.00990.9929
AQI 0.76851.70331.09540.86771.00960.91031.16621.0760.8460.868
SGI 1.40031.3341.23691.00451.35051.3061.19571.07561.16931.1084
DEPI 1.06160.91240.92120.82670.97681.35540.81750.95980.9461.1535
SGAI 1.03131.01161.05440.95230.95510.96160.98931.01290.97111.0017
LVGI 1.08631.18951.22441.04921.00991.12621.02731.01371.17941.1202
TATA -0.1053-0.128-0.1473-0.1125-0.1249-0.1183-0.1183-0.103-0.1106-0.1418
M-score -2.67-2.48-3.14-3.00-2.97-2.68-2.89-2.85-2.95-3.09

F5 Networks Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.02530.98521.04171.03271.01450.98651.01660.94761.04071.0024
GMI 0.99921.0051.00671.00691.00991.00340.99950.9970.99290.9964
AQI 1.0760.99610.91860.92240.8460.88310.92980.8180.8680.8516
SGI 1.07561.07191.11271.14741.16931.17481.1561.13341.10841.0884
DEPI 0.95980.96790.94780.92830.9460.95950.97661.08941.15351.1998
SGAI 1.01291.00410.98210.96360.97110.97450.97840.98771.00171.0035
LVGI 1.01371.06661.09491.13871.17941.12211.13811.12871.12021.1141
TATA -0.103-0.1101-0.1094-0.1084-0.1106-0.112-0.1341-0.1405-0.1418-0.1482
M-score -2.85-2.97-2.92-2.90-2.95-2.95-3.03-3.17-3.09-3.17
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