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Finisar Corp (NAS:FNSR)
Beneish M-Score
-2.57 (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.

Finisar Corp has a M-score of -2.57 suggests that the company is not a manipulator.

FNSR' s 10-Year Beneish M-Score Range
Min: -10.56   Max: 138.64
Current: -2.57

-10.56
138.64

During the past 13 years, the highest Beneish M-Score of Finisar Corp was 138.64. The lowest was -10.56. And the median was -2.93.


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 Finisar Corp 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 * 0.846+0.528 * 1.1604+0.404 * 1.1118+0.892 * 1.1304+0.115 * 0.9467
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1596+4.679 * -0.0418-0.327 * 0.8904
=-2.57

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

This Year (Jan15) TTM:Last Year (Jan14) TTM:
Accounts Receivable was $210 Mil.
Revenue was 306.283 + 296.981 + 327.638 + 306.025 = $1,237 Mil.
Gross Profit was 77.953 + 84.92 + 98.819 + 96.564 = $358 Mil.
Total Current Assets was $1,056 Mil.
Total Assets was $1,521 Mil.
Property, Plant and Equipment(Net PPE) was $305 Mil.
Depreciation, Depletion and Amortization(DDA) was $88 Mil.
Selling, General & Admin. Expense(SGA) was $119 Mil.
Total Current Liabilities was $198 Mil.
Long-Term Debt was $219 Mil.
Net Income was 1.679 + -11.362 + 14.243 + 28.75 = $33 Mil.
Non Operating Income was 2.05 + 0.033 + -2.026 + 8.124 = $8 Mil.
Cash Flow from Operations was 39.618 + 8.861 + 26.014 + 14.201 = $89 Mil.
Accounts Receivable was $220 Mil.
Revenue was 294.018 + 290.722 + 266.068 + 243.417 = $1,094 Mil.
Gross Profit was 105.689 + 103.373 + 91.373 + 67.326 = $368 Mil.
Total Current Assets was $1,044 Mil.
Total Assets was $1,428 Mil.
Property, Plant and Equipment(Net PPE) was $247 Mil.
Depreciation, Depletion and Amortization(DDA) was $67 Mil.
Selling, General & Admin. Expense(SGA) was $90 Mil.
Total Current Liabilities was $229 Mil.
Long-Term Debt was $210 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)
=(210.116 / 1236.927) / (219.716 / 1094.225)
=0.16986936 / 0.200796
=0.846

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)
=(84.92 / 1094.225) / (77.953 / 1236.927)
=0.33609267 / 0.28963391
=1.1604

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 - (1055.647 + 304.547) / 1521.356) / (1 - (1044.355 + 247.394) / 1427.786)
=0.10593313 / 0.09527828
=1.1118

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
=1236.927 / 1094.225
=1.1304

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))
=(66.79 / (66.79 + 247.394)) / (88.193 / (88.193 + 304.547))
=0.21258244 / 0.22455823
=0.9467

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)
=(118.572 / 1236.927) / (90.454 / 1094.225)
=0.09586014 / 0.0826649
=1.1596

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)
=((219.072 + 197.796) / 1521.356) / ((210.029 + 229.36) / 1427.786)
=0.27401082 / 0.3077415
=0.8904

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
=(33.31 - 8.181 - 88.694) / 1521.356
=-0.0418

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.

Finisar Corp has a M-score of -2.57 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.

Finisar Corp Annual Data

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
DSRI 0.89380.95050.85580.88051.34641.20680.8561.03810.80811.2147
GMI 0.70.66870.77191.05731.15130.97860.8671.1471.04310.8016
AQI 1.50270.83210.94140.7280.48940.49851.13231.91310.91820.8133
SGI 1.51291.29721.14891.05171.12921.26721.50631.0040.98081.2381
DEPI 0.91250.95631.28621.02010.96651.09241.15251.00651.05791.1825
SGAI 0.95470.92820.97581.06350.70110.83790.80430.97461.11760.9189
LVGI 1.1560.89651.01541.16990.93240.64930.45360.90481.01441.6975
TATA -0.105-0.0806-0.0768-0.1459-0.68380.04670.0076-0.0356-0.15210.0036
M-score -2.62-2.84-2.95-3.37-5.30-1.89-1.91-2.13-3.41-2.43

Finisar Corp Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
DSRI 0.94370.80880.80811.02280.98121.2021.21471.06440.97190.846
GMI 1.10581.08721.04310.94440.86860.81570.80160.89351.00851.1604
AQI 0.89970.88950.91820.79310.75430.6510.81330.86160.92391.1118
SGI 0.96470.98020.98081.0371.11021.17551.23811.24341.17921.1304
DEPI 0.99621.05471.05791.10641.17731.16051.18251.16411.04210.9467
SGAI 0.90530.91141.11761.00440.99880.95540.91891.021.14031.1596
LVGI 0.83140.88761.01441.13321.19951.72591.69751.57191.41870.8904
TATA -0.0964-0.1348-0.1521-0.1242-0.0812-0.03070.0036-0.0059-0.0061-0.0418
M-score -2.93-3.24-3.41-3.15-2.99-2.73-2.43-2.51-2.56-2.57
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