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First Solar Inc (NAS:FSLR)
Beneish M-Score
-1.96 (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.

First Solar Inc has a M-score of -1.96 signals that the company is a manipulator.

FSLR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.85   Max: 3.01
Current: -1.96

-3.85
3.01

During the past 13 years, the highest Beneish M-Score of First Solar Inc was 3.01. The lowest was -3.85. And the median was -1.93.


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 First Solar 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 * 0.7656+0.528 * 0.7485+0.404 * 1.2197+0.892 * 1.3594+0.115 * 0.9647
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7103+4.679 * 0.0848-0.327 * 0.9433
=-1.96

* 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 $349 Mil.
Revenue was 848.484 + 942.324 + 1271.245 + 896.217 = $3,958 Mil.
Gross Profit was 262.945 + 231.438 + 484.365 + 164.483 = $1,143 Mil.
Total Current Assets was $3,274 Mil.
Total Assets was $7,578 Mil.
Property, Plant and Equipment(Net PPE) was $1,381 Mil.
Depreciation, Depletion and Amortization(DDA) was $253 Mil.
Selling, General & Admin. Expense(SGA) was $265 Mil.
Total Current Liabilities was $1,064 Mil.
Long-Term Debt was $205 Mil.
Net Income was 170.565 + 164.135 + 349.318 + 94.49 = $779 Mil.
Non Operating Income was 32.313 + -3.66 + -3.481 + -3.144 = $22 Mil.
Cash Flow from Operations was 50.494 + 53.097 + 21.002 + -10.401 = $114 Mil.
Accounts Receivable was $336 Mil.
Revenue was 469.209 + 1007.993 + 890.288 + 544.353 = $2,912 Mil.
Gross Profit was 38.981 + 308.382 + 189.402 + 92.725 = $629 Mil.
Total Current Assets was $3,150 Mil.
Total Assets was $6,675 Mil.
Property, Plant and Equipment(Net PPE) was $1,414 Mil.
Depreciation, Depletion and Amortization(DDA) was $248 Mil.
Selling, General & Admin. Expense(SGA) was $275 Mil.
Total Current Liabilities was $985 Mil.
Long-Term Debt was $200 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)
=(349.467 / 3958.27) / (335.804 / 2911.843)
=0.08828781 / 0.11532353
=0.7656

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)
=(231.438 / 2911.843) / (262.945 / 3958.27)
=0.21618267 / 0.28882087
=0.7485

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 - (3274.157 + 1380.635) / 7577.789) / (1 - (3149.703 + 1414.166) / 6674.674)
=0.38573217 / 0.31624091
=1.2197

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
=3958.27 / 2911.843
=1.3594

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))
=(248.338 / (248.338 + 1414.166)) / (252.94 / (252.94 + 1380.635))
=0.14937588 / 0.15483831
=0.9647

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)
=(265.175 / 3958.27) / (274.647 / 2911.843)
=0.06699265 / 0.09432068
=0.7103

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)
=((205.262 + 1064.129) / 7577.789) / ((200.386 + 984.906) / 6674.674)
=0.16751469 / 0.17758051
=0.9433

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
=(778.508 - 22.028 - 114.192) / 7577.789
=0.0848

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.

First Solar Inc has a M-score of -1.96 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.

First Solar Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 9.06960.1741.37362.21791.09070.93742.5240.70130.20093.5032
GMI 0.85840.80560.91641.07671.09381.31571.38770.9691.07130.9494
AQI 1.2615.26190.90933.27671.03410.74891.34370.79011.30721.0941
SGI 2.80833.73392.47291.65791.24071.07911.21770.98251.02481.0552
DEPI 0.81031.00270.81630.56921.17830.85770.78051.01521.00810.9108
SGAI 0.84480.58890.84260.83760.95871.2120.53150.96240.92550.9954
LVGI 0.31880.95221.3850.62670.96121.77470.9151.00830.68010.9578
TATA -0.0049-0.0352-0.0565-0.0111-0.0092-0.0013-0.135-0.0728-0.0410.1257
M-score 6.790.74-1.290.24-2.12-2.71-1.09-3.21-3.100.48

First Solar Inc Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.70130.31860.32921.61160.20091.72891.57790.60033.50420.7656
GMI 0.9690.98011.05291.1881.07151.23021.16660.82360.94930.7485
AQI 0.79011.1921.23211.00081.30721.02371.07971.24021.09411.2197
SGI 0.98250.96631.10660.87231.02510.83090.92481.15561.05491.3594
DEPI 1.01520.92310.89780.98181.00810.99220.96520.95480.91080.9647
SGAI 0.96240.98530.78481.05380.92531.2921.29210.97910.99570.7103
LVGI 1.00830.55130.68180.6390.68010.99660.84670.96330.95780.9433
TATA -0.0728-0.00950.00230.0512-0.041-0.0514-0.0180.01010.12570.0848
M-score -3.21-2.97-2.74-1.59-3.10-2.12-1.98-2.650.48-1.96
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