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FormFactor Inc (NAS:FORM)
Beneish M-Score
-1.23 (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.

FormFactor Inc has a M-score of -1.23 signals that the company is a manipulator.

FORM' s Beneish M-Score Range Over the Past 10 Years
Min: -4.52   Max: 10.98
Current: -1.23

-4.52
10.98

During the past 13 years, the highest Beneish M-Score of FormFactor Inc was 10.98. The lowest was -4.52. And the median was -2.47.


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 FormFactor Inc 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 * 2.0699+0.528 * 1.1525+0.404 * 2.7213+0.892 * 0.9462+0.115 * 1.5336
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.039+4.679 * 0.0126-0.327 * 2.7735
=-1.23

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $86.1 Mil.
Revenue was 83.083 + 53.611 + 71.782 + 65.862 = $274.3 Mil.
Gross Profit was 25.427 + 9.792 + 21.19 + 18.455 = $74.9 Mil.
Total Current Assets was $284.4 Mil.
Total Assets was $695.3 Mil.
Property, Plant and Equipment(Net PPE) was $43.8 Mil.
Depreciation, Depletion and Amortization(DDA) was $22.3 Mil.
Selling, General & Admin. Expense(SGA) was $48.4 Mil.
Total Current Liabilities was $118.8 Mil.
Long-Term Debt was $141.4 Mil.
Net Income was 36.884 + -13.8 + -0.619 + -2.525 = $19.9 Mil.
Non Operating Income was -0.302 + -0.314 + -0.037 + 0.982 = $0.3 Mil.
Cash Flow from Operations was -0.558 + -3.032 + 6.921 + 7.531 = $10.9 Mil.
Accounts Receivable was $44.0 Mil.
Revenue was 73.885 + 70.829 + 71.285 + 73.933 = $289.9 Mil.
Gross Profit was 23.303 + 22.789 + 20.948 + 24.142 = $91.2 Mil.
Total Current Assets was $256.6 Mil.
Total Assets was $348.8 Mil.
Property, Plant and Equipment(Net PPE) was $24.5 Mil.
Depreciation, Depletion and Amortization(DDA) was $26.2 Mil.
Selling, General & Admin. Expense(SGA) was $49.2 Mil.
Total Current Liabilities was $47.1 Mil.
Long-Term Debt was $0.0 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)
=(86.137 / 274.338) / (43.979 / 289.932)
=0.31398129 / 0.15168729
=2.0699

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)
=(91.182 / 289.932) / (74.864 / 274.338)
=0.31449443 / 0.27288965
=1.1525

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 - (284.438 + 43.791) / 695.256) / (1 - (256.614 + 24.485) / 348.753)
=0.52790195 / 0.1939883
=2.7213

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
=274.338 / 289.932
=0.9462

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))
=(26.214 / (26.214 + 24.485)) / (22.273 / (22.273 + 43.791))
=0.51705162 / 0.33714277
=1.5336

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)
=(48.371 / 274.338) / (49.203 / 289.932)
=0.17631899 / 0.16970531
=1.039

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)
=((141.417 + 118.758) / 695.256) / ((0 + 47.055) / 348.753)
=0.37421468 / 0.13492357
=2.7735

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
=(19.94 - 0.329 - 10.862) / 695.256
=0.0126

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.

FormFactor Inc has a M-score of -1.23 signals that the company is likely to 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.

FormFactor Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.79841.01721.081.33850.69780.49312.16610.8051.28960.7735
GMI 0.90180.93943.093928.5089-0.5023-0.09730.87240.77690.63330.9497
AQI 0.59892.2761.42520.48021.5111.07129.80090.98210.78520.8207
SGI 1.55461.25180.45480.64391.39330.8981.05441.29681.15981.0515
DEPI 0.8851.11890.77120.87930.58291.82420.87070.60040.82821.0911
SGAI 1.0521.03352.2621.27940.6150.77390.99970.83350.83250.8345
LVGI 0.68430.86520.89821.15791.00110.76421.53660.96651.25420.9146
TATA -0.0696-0.0145-0.0724-0.1562-0.2567-0.0985-0.0272-0.1541-0.1075-0.1173
M-score -2.63-1.77-2.1610.98-4.18-3.841.81-3.25-2.93-3.22

FormFactor Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.9260.91860.96791.28960.91820.86570.66950.77350.93062.0699
GMI 0.79470.72720.61190.63330.6250.65260.81480.94971.13061.1525
AQI 0.95460.91520.86630.78520.77720.78070.82010.82070.82642.7213
SGI 1.19621.17241.06571.15981.20661.21061.14681.05150.93560.9462
DEPI 0.68060.77630.84170.82820.93740.98831.07091.09111.07271.5336
SGAI 0.80670.78890.85290.83250.83140.80390.8050.83450.9581.039
LVGI 0.93611.0610.96911.25421.01121.04990.94860.91461.26712.7735
TATA -0.1437-0.1352-0.1113-0.1075-0.1152-0.1215-0.1364-0.1173-0.12490.0126
M-score -3.15-3.22-3.21-2.93-3.18-3.24-3.40-3.22-3.26-1.23
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