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Finisar Corp (NAS:FNSR)
Beneish M-Score
-2.51 (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 -2.51 suggests that the company is not a manipulator.

FNSR' s 10-Year Beneish M-Score Range
Min: -10.56   Max: 138.64
Current: -2.51

-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 * 1.0644+0.528 * 0.8935+0.404 * 0.8616+0.892 * 1.2434+0.115 * 1.1641
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.02+4.679 * -0.0059-0.327 * 1.5719
=-2.51

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

This Year (Jul14) TTM:Last Year (Jul13) TTM:
Accounts Receivable was $273 Mil.
Revenue was 327.638 + 306.025 + 294.018 + 290.722 = $1,218 Mil.
Gross Profit was 98.819 + 96.564 + 105.689 + 103.373 = $404 Mil.
Total Current Assets was $1,079 Mil.
Total Assets was $1,544 Mil.
Property, Plant and Equipment(Net PPE) was $301 Mil.
Depreciation, Depletion and Amortization(DDA) was $76 Mil.
Selling, General & Admin. Expense(SGA) was $106 Mil.
Total Current Liabilities was $256 Mil.
Long-Term Debt was $214 Mil.
Net Income was 14.243 + 28.75 + 27.061 + 29.965 = $100 Mil.
Non Operating Income was -2.026 + 8.124 + -1.873 + 0.495 = $5 Mil.
Cash Flow from Operations was 26.014 + 14.201 + 14.585 + 49.598 = $104 Mil.
Accounts Receivable was $206 Mil.
Revenue was 266.068 + 243.417 + 238.351 + 232.041 = $980 Mil.
Gross Profit was 91.373 + 67.326 + 68.044 + 63.874 = $291 Mil.
Total Current Assets was $721 Mil.
Total Assets was $1,065 Mil.
Property, Plant and Equipment(Net PPE) was $213 Mil.
Depreciation, Depletion and Amortization(DDA) was $65 Mil.
Selling, General & Admin. Expense(SGA) was $84 Mil.
Total Current Liabilities was $167 Mil.
Long-Term Debt was $40 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)
=(272.907 / 1218.403) / (206.209 / 979.877)
=0.22398747 / 0.21044376
=1.0644

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)
=(96.564 / 979.877) / (98.819 / 1218.403)
=0.29658518 / 0.33194682
=0.8935

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 - (1078.993 + 301.02) / 1543.652) / (1 - (721.204 + 213.044) / 1065.315)
=0.1060077 / 0.12303122
=0.8616

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
=1218.403 / 979.877
=1.2434

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))
=(65.307 / (65.307 + 213.044)) / (75.988 / (75.988 + 301.02))
=0.23462104 / 0.2015554
=1.1641

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)
=(106.3 / 1218.403) / (83.813 / 979.877)
=0.08724535 / 0.0855342
=1.02

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)
=((214.496 + 256.141) / 1543.652) / ((40.015 + 166.613) / 1065.315)
=0.30488543 / 0.19395953
=1.5719

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
=(100.019 - 4.72 - 104.398) / 1543.652
=-0.0059

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 -2.51 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

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
DSRI 1.03811.1120.94370.80880.80811.02280.98121.2021.21471.0644
GMI 1.1471.13511.10581.08721.04310.94440.86860.81570.80160.8935
AQI 1.91310.88140.89970.88950.91820.79310.75430.6510.81330.8616
SGI 1.0040.9750.96470.98020.98081.0371.11021.17551.23811.2434
DEPI 1.00650.97070.99621.05471.05791.10641.17731.16051.18251.1641
SGAI 0.97460.96950.90530.91141.11761.00440.99880.95540.91891.02
LVGI 0.90480.81460.83140.88761.01441.13321.19951.72591.69751.5719
TATA -0.0356-0.0433-0.0964-0.1348-0.1521-0.1242-0.0812-0.03070.0036-0.0059
M-score -2.13-2.52-2.93-3.24-3.41-3.15-2.99-2.73-2.43-2.51
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