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Fusion-io Inc (NYSE:FIO)
Beneish M-Score
-2.27 (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.

Fusion-io Inc has a M-score of -2.27 suggests that the company is not a manipulator.

FIO' s 10-Year Beneish M-Score Range
Min: -3.22   Max: -2.27
Current: -2.27

-3.22
-2.27

During the past 5 years, the highest Beneish M-Score of Fusion-io Inc was -2.27. The lowest was -3.22. And the median was -2.38.


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 Fusion-io 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 * 1.6425+0.528 * 1.0523+0.404 * 2.2672+0.892 * 0.8948+0.115 * 0.6825
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3166+4.679 * -0.127-0.327 * 1.4326
=-2.27

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $74.2 Mil.
Revenue was 100.528 + 94.501 + 86.293 + 106.052 = $387.4 Mil.
Gross Profit was 51.237 + 53.013 + 49.753 + 61.871 = $215.9 Mil.
Total Current Assets was $383.4 Mil.
Total Assets was $587.3 Mil.
Property, Plant and Equipment(Net PPE) was $31.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.2 Mil.
Selling, General & Admin. Expense(SGA) was $208.3 Mil.
Total Current Liabilities was $94.4 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -30.654 + -21.301 + -27.896 + -23.844 = $-103.7 Mil.
Non Operating Income was -0.027 + 0.023 + 0.186 + 0.024 = $0.2 Mil.
Cash Flow from Operations was -18.759 + 13.005 + -17.146 + -6.426 = $-29.3 Mil.
Accounts Receivable was $50.5 Mil.
Revenue was 87.65 + 120.569 + 118.115 + 106.596 = $432.9 Mil.
Gross Profit was 48.129 + 74.421 + 70.05 + 61.291 = $253.9 Mil.
Total Current Assets was $484.6 Mil.
Total Assets was $595.2 Mil.
Property, Plant and Equipment(Net PPE) was $33.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $13.6 Mil.
Selling, General & Admin. Expense(SGA) was $176.8 Mil.
Total Current Liabilities was $66.8 Mil.
Long-Term Debt was $0.0 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)
=(74.211 / 387.374) / (50.494 / 432.93)
=0.19157455 / 0.11663317
=1.6425

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)
=(53.013 / 432.93) / (51.237 / 387.374)
=0.58644816 / 0.5572754
=1.0523

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 - (383.355 + 31.656) / 587.346) / (1 - (484.591 + 33.577) / 595.195)
=0.29341308 / 0.12941473
=2.2672

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
=387.374 / 432.93
=0.8948

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))
=(13.62 / (13.62 + 33.577)) / (23.19 / (23.19 + 31.656))
=0.28857766 / 0.42282026
=0.6825

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)
=(208.253 / 387.374) / (176.782 / 432.93)
=0.5376019 / 0.40833853
=1.3166

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 + 94.368) / 587.346) / ((0 + 66.751) / 595.195)
=0.1606685 / 0.1121498
=1.4326

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
=(-103.695 - 0.206 - -29.326) / 587.346
=-0.127

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.

Fusion-io Inc has a M-score of -2.27 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.

Fusion-io Inc Annual Data

Jun09Jun10Jun11Jun12Jun13
DSRI 1.0126
GMI 0.9471
AQI 2.5961
SGI 1.2032
DEPI 0.7083
SGAI 1.1184
LVGI 1.2455
TATA -0.1277
M-score -2.40

Fusion-io Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.38420.76741.01260.97931.05721.6425
GMI 1.0040.97990.94710.94771.02051.0523
AQI 0.78321.03942.59612.86692.85772.2672
SGI 1.47761.33441.20320.99380.85210.8948
DEPI 0.92390.77220.70830.67860.66930.6825
SGAI 0.97671.00671.11841.33851.4851.3166
LVGI 1.3541.22751.24550.9121.2821.4326
TATA -0.0965-0.1564-0.1277-0.1085-0.1508-0.127
M-score -2.36-3.22-2.40-2.35-2.72-2.27
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