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Finisar Corp (NAS:FNSR)
Beneish M-Score
-2.67 (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 -2.67 suggests that the company is not a manipulator.

FNSR' s 10-Year Beneish M-Score Range
Min: -10.42   Max: -1.85
Current: -2.67

-10.42
-1.85

During the past 13 years, the highest Beneish M-Score of Finisar Corp was -1.85. The lowest was -10.42. And the median was -2.90.


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 * 0.9073+0.528 * 1.2234+0.404 * 1.0387+0.892 * 1.0814+0.115 * 0.9047
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1034+4.679 * -0.0682-0.327 * 0.8982
=-2.67

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

This Year (Apr15) TTM:Last Year (Apr14) TTM:
Accounts Receivable was $254 Mil.
Revenue was 320.042 + 306.283 + 296.981 + 327.638 = $1,251 Mil.
Gross Profit was 89.218 + 77.953 + 84.92 + 98.819 = $351 Mil.
Total Current Assets was $1,064 Mil.
Total Assets was $1,552 Mil.
Property, Plant and Equipment(Net PPE) was $316 Mil.
Depreciation, Depletion and Amortization(DDA) was $92 Mil.
Selling, General & Admin. Expense(SGA) was $119 Mil.
Total Current Liabilities was $206 Mil.
Long-Term Debt was $221 Mil.
Net Income was 7.327 + 1.679 + -11.362 + 14.243 = $12 Mil.
Non Operating Income was 4.042 + 2.05 + 0.033 + -2.026 = $4 Mil.
Cash Flow from Operations was 39.104 + 39.618 + 8.861 + 26.014 = $114 Mil.
Accounts Receivable was $259 Mil.
Revenue was 306.025 + 294.018 + 290.722 + 266.068 = $1,157 Mil.
Gross Profit was 96.564 + 105.689 + 103.373 + 91.373 = $397 Mil.
Total Current Assets was $1,065 Mil.
Total Assets was $1,498 Mil.
Property, Plant and Equipment(Net PPE) was $273 Mil.
Depreciation, Depletion and Amortization(DDA) was $70 Mil.
Selling, General & Admin. Expense(SGA) was $100 Mil.
Total Current Liabilities was $246 Mil.
Long-Term Debt was $212 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)
=(253.884 / 1250.944) / (258.769 / 1156.833)
=0.20295393 / 0.22368743
=0.9073

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)
=(77.953 / 1156.833) / (89.218 / 1250.944)
=0.34317745 / 0.28051615
=1.2234

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 - (1064.263 + 315.777) / 1551.882) / (1 - (1064.573 + 273.328) / 1497.546)
=0.11073136 / 0.1066044
=1.0387

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
=1250.944 / 1156.833
=1.0814

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))
=(70.149 / (70.149 + 273.328)) / (92.073 / (92.073 + 315.777))
=0.20423202 / 0.22575211
=0.9047

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)
=(119.034 / 1250.944) / (99.761 / 1156.833)
=0.09515534 / 0.0862363
=1.1034

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)
=((221.406 + 205.517) / 1551.882) / ((212.253 + 246.43) / 1497.546)
=0.27510017 / 0.30628976
=0.8982

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
=(11.887 - 4.099 - 113.597) / 1551.882
=-0.0682

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 -2.67 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

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
DSRI 0.80880.80811.02280.98121.2021.39691.06440.97190.8460.9073
GMI 1.08721.04310.94440.86860.81570.80160.89351.00851.16041.2234
AQI 0.88950.91820.79310.75430.6510.81330.86160.92391.11181.0387
SGI 0.98020.98081.0371.11021.17551.23811.24341.17921.13041.0814
DEPI 1.05471.05791.10641.17731.16051.18251.16411.04210.94670.9047
SGAI 0.91141.11761.00440.99880.95540.91891.021.14031.15961.1034
LVGI 0.88761.01441.13321.19951.72591.69751.57191.41870.89040.8982
TATA -0.1348-0.1521-0.1242-0.0812-0.03070.0036-0.0059-0.0061-0.0418-0.0682
M-score -3.24-3.41-3.15-2.99-2.73-2.26-2.51-2.56-2.57-2.67
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