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FormFactor Inc (NAS:FORM)
Beneish M-Score
-3.26 (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 -3.26 suggests that the company is not a manipulator.

FORM' s Beneish M-Score Range Over the Past 10 Years
Min: -4.52   Max: 10.98
Current: -3.26

-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 -2.50.


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 * 0.9306+0.528 * 1.1306+0.404 * 0.8264+0.892 * 0.9356+0.115 * 1.0727
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.958+4.679 * -0.1249-0.327 * 1.2671
=-3.26

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $35.7 Mil.
Revenue was 53.611 + 71.782 + 65.862 + 73.885 = $265.1 Mil.
Gross Profit was 9.792 + 21.19 + 18.455 + 23.303 = $72.7 Mil.
Total Current Assets was $258.3 Mil.
Total Assets was $340.5 Mil.
Property, Plant and Equipment(Net PPE) was $23.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $23.1 Mil.
Selling, General & Admin. Expense(SGA) was $45.7 Mil.
Total Current Liabilities was $49.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -13.8 + -0.619 + -2.525 + 0.838 = $-16.1 Mil.
Non Operating Income was -0.314 + -0.037 + 0.982 + 0.1 = $0.7 Mil.
Cash Flow from Operations was -3.032 + 6.921 + 7.531 + 14.281 = $25.7 Mil.
Accounts Receivable was $41.1 Mil.
Revenue was 70.829 + 71.285 + 73.933 + 67.352 = $283.4 Mil.
Gross Profit was 22.789 + 20.948 + 24.142 + 20.024 = $87.9 Mil.
Total Current Assets was $245.5 Mil.
Total Assets was $341.5 Mil.
Property, Plant and Equipment(Net PPE) was $25.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $28.2 Mil.
Selling, General & Admin. Expense(SGA) was $51.0 Mil.
Total Current Liabilities was $39.3 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)
=(35.743 / 265.14) / (41.055 / 283.399)
=0.13480803 / 0.14486643
=0.9306

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)
=(87.903 / 283.399) / (72.74 / 265.14)
=0.31017399 / 0.27434563
=1.1306

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 - (258.336 + 23.707) / 340.528) / (1 - (245.464 + 25.077) / 341.519)
=0.17174799 / 0.20783031
=0.8264

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
=265.14 / 283.399
=0.9356

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))
=(28.244 / (28.244 + 25.077)) / (23.126 / (23.126 + 23.707))
=0.52969749 / 0.49379711
=1.0727

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)
=(45.722 / 265.14) / (51.013 / 283.399)
=0.17244475 / 0.18000416
=0.958

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)
=((0 + 49.647) / 340.528) / ((0 + 39.296) / 341.519)
=0.14579418 / 0.11506241
=1.2671

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
=(-16.106 - 0.731 - 25.701) / 340.528
=-0.1249

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 -3.26 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.

FormFactor Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.79841.01721.081.33850.69780.49312.16610.8051.28960.7735
GMI 0.87420.96913.0939-49.78410.2876-0.09730.87240.77690.63330.9497
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 0.8851.11890.77120.87520.58561.82420.87070.60040.82821.0911
SGAI 1.03521.03352.2621.27940.6150.77390.99970.83350.83250.8345
LVGI 0.68430.86520.89821.15791.00110.76421.53660.96651.25420.9146
TATA -0.0645-0.0145-0.0724-0.1562-0.2567-0.0985-0.0272-0.1541-0.1075-0.1173
M-score -2.62-1.76-2.16-30.36-3.76-3.841.81-3.25-2.93-3.22

FormFactor Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.8050.9260.91860.96791.28960.91820.86570.66950.77350.9306
GMI 0.77690.79470.72720.61190.63330.6250.65260.81480.94971.1306
AQI 0.98210.95460.91520.86630.78520.77720.78070.82010.82070.8264
SGI 1.29681.19621.17241.06571.15981.20661.21061.14681.05150.9356
DEPI 0.60040.68060.77630.84170.82820.93740.98831.07091.09111.0727
SGAI 0.83350.80670.78890.85290.83250.83140.80390.8050.83450.958
LVGI 0.96650.93611.0610.96911.25421.01121.04990.94860.91461.2671
TATA -0.1541-0.1437-0.1352-0.1113-0.1075-0.1152-0.1215-0.1364-0.1173-0.1249
M-score -3.25-3.15-3.22-3.21-2.93-3.18-3.24-3.40-3.22-3.26
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