Switch to:
Finisar Corp (NAS:FNSR)
Beneish M-Score
-2.78 (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 -2.78 suggests that the company is not a manipulator.

FNSR' s Beneish M-Score Range Over the Past 10 Years
Min: -10.56   Max: 140.19
Current: -2.78

-10.56
140.19

During the past 13 years, the highest Beneish M-Score of Finisar Corp was 140.19. The lowest was -10.56. And the median was -2.84.


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 * 1.1238+0.528 * 1.0362+0.404 * 0.9018+0.892 * 1.0222+0.115 * 1.0441
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8941+4.679 * -0.0914-0.327 * 1.0282
=-2.78

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

This Year (Jan16) TTM:Last Year (Jan15) TTM:
Accounts Receivable was $241 Mil.
Revenue was 309.206 + 321.136 + 314.03 + 320.042 = $1,264 Mil.
Gross Profit was 87.74 + 89.091 + 87.377 + 89.218 = $353 Mil.
Total Current Assets was $1,102 Mil.
Total Assets was $1,598 Mil.
Property, Plant and Equipment(Net PPE) was $343 Mil.
Depreciation, Depletion and Amortization(DDA) was $94 Mil.
Selling, General & Admin. Expense(SGA) was $108 Mil.
Total Current Liabilities was $222 Mil.
Long-Term Debt was $229 Mil.
Net Income was 12.084 + 6.644 + 3.393 + 7.327 = $29 Mil.
Non Operating Income was 1.968 + 0.445 + 0.881 + 4.042 = $7 Mil.
Cash Flow from Operations was 31.665 + 62.734 + 34.598 + 39.104 = $168 Mil.
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.



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)
=(241.384 / 1264.414) / (210.116 / 1236.927)
=0.19090583 / 0.16986936
=1.1238

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)
=(89.091 / 1236.927) / (87.74 / 1264.414)
=0.28963391 / 0.27951763
=1.0362

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 - (1102.28 + 342.818) / 1597.728) / (1 - (1055.647 + 304.547) / 1521.356)
=0.0955294 / 0.10593313
=0.9018

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
=1264.414 / 1236.927
=1.0222

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))
=(88.193 / (88.193 + 304.547)) / (93.932 / (93.932 + 342.818))
=0.22455823 / 0.21507041
=1.0441

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)
=(108.37 / 1264.414) / (118.572 / 1236.927)
=0.08570769 / 0.09586014
=0.8941

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)
=((228.561 + 221.573) / 1597.728) / ((219.072 + 197.796) / 1521.356)
=0.28173381 / 0.27401082
=1.0282

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
=(29.448 - 7.336 - 168.101) / 1597.728
=-0.0914

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 -2.78 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

Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14Apr15
DSRI 0.95050.85580.88051.34641.20680.8561.03810.80811.39690.9073
GMI 0.66870.77191.05731.15130.97860.8671.1471.04310.80161.2234
AQI 0.83210.94140.7280.48940.49851.13231.91310.91820.81331.0387
SGI 1.29721.14891.05171.12921.26721.50631.0040.98081.23811.0814
DEPI 0.95631.28621.02010.96651.09241.15251.00651.05791.18250.9047
SGAI 0.92820.97581.06350.70110.83790.80430.97461.11760.91891.1034
LVGI 0.89651.01541.16990.93240.64930.45360.90481.01441.69750.8982
TATA -0.0806-0.0768-0.1459-0.68380.04670.0076-0.0356-0.15210.0036-0.0682
M-score -2.84-2.95-3.37-5.30-1.89-1.91-2.13-3.41-2.26-2.67

Finisar Corp Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
DSRI 0.98121.2021.39691.06440.97190.8460.90730.99441.0451.1238
GMI 0.86860.81570.80160.89351.00851.16041.22341.20991.1571.0362
AQI 0.75430.6510.81330.86160.92391.11181.03871.02150.92240.9018
SGI 1.11021.17551.23811.24341.17921.13041.08141.01551.03011.0222
DEPI 1.17731.16051.18251.16641.04210.94670.90470.89060.9891.0441
SGAI 0.99880.95540.91891.021.14031.15961.10341.10010.87060.8941
LVGI 1.19951.72591.69751.57191.41870.89040.89820.92250.95981.0282
TATA -0.0812-0.03070.0036-0.0059-0.0061-0.0418-0.0682-0.0817-0.1043-0.0914
M-score -2.99-2.73-2.26-2.51-2.56-2.57-2.67-2.74-2.81-2.78
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK