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Finisar Corp (NAS:FNSR)
Beneish M-Score
-2.81 (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 -2.81 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: -2.81

-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 -2.86.


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 * 1.045+0.528 * 1.157+0.404 * 0.9224+0.892 * 1.0301+0.115 * 0.989
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8706+4.679 * -0.1043-0.327 * 0.9598
=-2.81

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

This Year (Oct15) TTM:Last Year (Oct14) TTM:
Accounts Receivable was $230 Mil.
Revenue was 321.136 + 314.03 + 320.042 + 306.283 = $1,261 Mil.
Gross Profit was 89.091 + 87.377 + 89.218 + 77.953 = $344 Mil.
Total Current Assets was $1,076 Mil.
Total Assets was $1,577 Mil.
Property, Plant and Equipment(Net PPE) was $345 Mil.
Depreciation, Depletion and Amortization(DDA) was $94 Mil.
Selling, General & Admin. Expense(SGA) was $107 Mil.
Total Current Liabilities was $221 Mil.
Long-Term Debt was $226 Mil.
Net Income was 6.644 + 3.393 + 7.327 + 1.679 = $19 Mil.
Non Operating Income was 0.445 + 0.881 + 4.042 + 2.05 = $7 Mil.
Cash Flow from Operations was 62.734 + 34.598 + 39.104 + 39.618 = $176 Mil.
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.



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)
=(230.065 / 1261.491) / (213.721 / 1224.662)
=0.18237546 / 0.17451427
=1.045

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)
=(87.377 / 1224.662) / (89.091 / 1261.491)
=0.31518247 / 0.27240702
=1.157

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 - (1076.061 + 344.695) / 1577.254) / (1 - (1048.578 + 306.331) / 1518.227)
=0.09922181 / 0.10757153
=0.9224

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
=1261.491 / 1224.662
=1.0301

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))
=(82.336 / (82.336 + 306.331)) / (93.958 / (93.958 + 344.695))
=0.21184201 / 0.21419664
=0.989

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)
=(106.583 / 1261.491) / (118.849 / 1224.662)
=0.0844897 / 0.09704637
=0.8706

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)
=((226.151 + 220.639) / 1577.254) / ((216.775 + 231.328) / 1518.227)
=0.2832708 / 0.29514888
=0.9598

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
=(19.043 - 7.418 - 176.054) / 1577.254
=-0.1043

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 -2.81 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

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
DSRI 1.02280.98121.2021.39691.06440.97190.8460.90730.99441.045
GMI 0.94440.86860.81570.80160.89351.00851.16041.22341.20991.157
AQI 0.79310.75430.6510.81330.86160.92391.11181.03871.02150.9224
SGI 1.0371.11021.17551.23811.24341.17921.13041.08141.01551.0301
DEPI 1.10641.17731.16051.18251.16641.04210.94670.90470.89060.989
SGAI 1.00440.99880.95540.91891.021.14031.15961.10341.10010.8706
LVGI 1.13321.19951.72591.69751.57191.41870.89040.89820.92250.9598
TATA -0.1242-0.0812-0.03070.0036-0.0059-0.0061-0.0418-0.0682-0.0817-0.1043
M-score -3.15-2.99-2.73-2.26-2.51-2.56-2.57-2.67-2.74-2.81
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