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Finisar Corp (NAS:FNSR)
Beneish M-Score
-2.56 (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 -2.56 suggests that the company is not a manipulator.

FNSR' s 10-Year Beneish M-Score Range
Min: -10.56   Max: 138.64
Current: -2.56

-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 * 0.9719+0.528 * 1.0085+0.404 * 0.9239+0.892 * 1.1792+0.115 * 1.0421
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1403+4.679 * -0.0061-0.327 * 1.4187
=-2.56

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

This Year (Oct14) TTM:Last Year (Oct13) TTM:
Accounts Receivable was $214 Mil.
Revenue was 296.981 + 327.638 + 306.025 + 294.018 = $1,225 Mil.
Gross Profit was 84.92 + 98.819 + 96.564 + 105.689 = $386 Mil.
Total Current Assets was $1,049 Mil.
Total Assets was $1,518 Mil.
Property, Plant and Equipment(Net PPE) was $306 Mil.
Depreciation, Depletion and Amortization(DDA) was $82 Mil.
Selling, General & Admin. Expense(SGA) was $119 Mil.
Total Current Liabilities was $231 Mil.
Long-Term Debt was $217 Mil.
Net Income was -11.362 + 14.243 + 28.75 + 27.061 = $59 Mil.
Non Operating Income was 0.033 + -2.026 + 8.124 + -1.873 = $4 Mil.
Cash Flow from Operations was 8.861 + 26.014 + 14.201 + 14.585 = $64 Mil.
Accounts Receivable was $186 Mil.
Revenue was 290.722 + 266.068 + 243.417 + 238.351 = $1,039 Mil.
Gross Profit was 103.373 + 91.373 + 67.326 + 68.044 = $330 Mil.
Total Current Assets was $781 Mil.
Total Assets was $1,145 Mil.
Property, Plant and Equipment(Net PPE) was $231 Mil.
Depreciation, Depletion and Amortization(DDA) was $65 Mil.
Selling, General & Admin. Expense(SGA) was $88 Mil.
Total Current Liabilities was $238 Mil.
Long-Term Debt was $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)
=(213.721 / 1224.662) / (186.486 / 1038.558)
=0.17451427 / 0.17956243
=0.9719

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)
=(98.819 / 1038.558) / (84.92 / 1224.662)
=0.31785996 / 0.31518247
=1.0085

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 - (1048.578 + 306.331) / 1518.227) / (1 - (781.002 + 231.022) / 1145.384)
=0.10757153 / 0.11643257
=0.9239

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
=1224.662 / 1038.558
=1.1792

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))
=(65.448 / (65.448 + 231.022)) / (82.336 / (82.336 + 306.331))
=0.22075758 / 0.21184201
=1.0421

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)
=(118.849 / 1224.662) / (88.385 / 1038.558)
=0.09704637 / 0.08510358
=1.1403

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)
=((216.775 + 231.328) / 1518.227) / ((0 + 238.295) / 1145.384)
=0.29514888 / 0.20804813
=1.4187

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
=(58.692 - 4.258 - 63.661) / 1518.227
=-0.0061

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 -2.56 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

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
DSRI 1.1120.94370.80880.80811.02280.98121.2021.21471.06440.9719
GMI 1.13511.10581.08721.04310.94440.86860.81570.80160.89351.0085
AQI 0.88140.89970.88950.91820.79310.75430.6510.81330.86160.9239
SGI 0.9750.96470.98020.98081.0371.11021.17551.23811.24341.1792
DEPI 0.97070.99621.05471.05791.10641.17731.16051.18251.16411.0421
SGAI 0.96950.90530.91141.11761.00440.99880.95540.91891.021.1403
LVGI 0.81460.83140.88761.01441.13321.19951.72591.69751.57191.4187
TATA -0.0433-0.0964-0.1348-0.1521-0.1242-0.0812-0.03070.0036-0.0059-0.0061
M-score -2.52-2.93-3.24-3.41-3.15-2.99-2.73-2.43-2.51-2.56
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