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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.
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.
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|
|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
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)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(53.013 / 432.93)||/||(51.237 / 387.374)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|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)|
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.
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))|
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)|
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)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(-103.695 - 0.206||-||-29.326)||/||587.346|
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.
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
Fusion-io Inc Annual Data
Fusion-io Inc Quarterly Data