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First Solar Inc (NAS:FSLR)
Beneish M-Score
-2.02 (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 -2.02 signals that the company is a manipulator.

FSLR' s 10-Year Beneish M-Score Range
Min: -3.81   Max: 2.93
Current: -2.02

-3.81
2.93

During the past 13 years, the highest Beneish M-Score of First Solar Inc was 2.93. The lowest was -3.81. And the median was -2.12.


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 * 1.1111+0.528 * 1.0549+0.404 * 1.2321+0.892 * 1.1064+0.115 * 0.8978
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.785+4.679 * 0.0031-0.327 * 0.6818
=-2.02

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $803 Mil.
Revenue was 544.353 + 950.158 + 768.437 + 1265.587 = $3,529 Mil.
Gross Profit was 92.725 + 236.711 + 189.296 + 364.034 = $883 Mil.
Total Current Assets was $3,170 Mil.
Total Assets was $6,612 Mil.
Property, Plant and Equipment(Net PPE) was $1,418 Mil.
Depreciation, Depletion and Amortization(DDA) was $245 Mil.
Selling, General & Admin. Expense(SGA) was $246 Mil.
Total Current Liabilities was $1,211 Mil.
Long-Term Debt was $134 Mil.
Net Income was 4.528 + 112.007 + 65.26 + 195.038 = $377 Mil.
Non Operating Income was -3.149 + -2.325 + -2.263 + -3.138 = $-11 Mil.
Cash Flow from Operations was 118.38 + -318.176 + 192.206 + 375.092 = $368 Mil.
Accounts Receivable was $653 Mil.
Revenue was 519.76 + 755.205 + 1075.011 + 839.147 = $3,189 Mil.
Gross Profit was 140.098 + 169.326 + 293.547 + 238.716 = $842 Mil.
Total Current Assets was $3,601 Mil.
Total Assets was $6,868 Mil.
Property, Plant and Equipment(Net PPE) was $1,561 Mil.
Depreciation, Depletion and Amortization(DDA) was $238 Mil.
Selling, General & Admin. Expense(SGA) was $284 Mil.
Total Current Liabilities was $1,855 Mil.
Long-Term Debt was $195 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)
=(802.811 / 3528.535) / (653.018 / 3189.123)
=0.22751964 / 0.20476413
=1.1111

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)
=(236.711 / 3189.123) / (92.725 / 3528.535)
=0.26392428 / 0.25017918
=1.0549

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 - (3170.269 + 1418.206) / 6612.015) / (1 - (3601.279 + 1560.908) / 6868.126)
=0.30603984 / 0.24838493
=1.2321

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
=3528.535 / 3189.123
=1.1064

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))
=(237.547 / (237.547 + 1560.908)) / (244.622 / (244.622 + 1418.206))
=0.13208393 / 0.14711203
=0.8978

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)
=(246.353 / 3528.535) / (283.654 / 3189.123)
=0.06981736 / 0.0889442
=0.785

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)
=((133.836 + 1211.243) / 6612.015) / ((194.57 + 1854.795) / 6868.126)
=0.20342951 / 0.2983878
=0.6818

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
=(376.833 - -10.875 - 367.502) / 6612.015
=0.0031

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 -2.02 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.070317.9930.26090.46172.21741.0912.54750.9460.6886
GMI -1.14240.85840.80560.91641.07671.09381.31571.38770.9709
AQI 3.07541.2615.26190.90933.27671.03410.74891.34370.7901
SGI 3.55442.80833.73392.47291.65791.24071.07911.21770.9823
DEPI 1.4230.81031.00270.81630.56921.17830.85770.78051.0152
SGAI 0.52340.84480.58890.84260.83760.95871.2120.53150.9626
LVGI 1.34460.31880.95221.3850.62670.96121.77470.9151.0083
TATA -0.0997-0.0049-0.0352-0.0565-0.0111-0.0092-0.0013-0.135-0.0723
M-score -1.8015.000.82-2.130.24-2.12-1.23-2.54-3.22

First Solar Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 2.20930.76941.00630.9460.65061.1020.54020.68861.04411.1111
GMI 1.55021.59381.76321.38771.12251.01720.88270.97090.98191.0549
AQI 0.68650.95281.13431.34371.12320.93640.94570.79011.1921.2321
SGI 1.05191.24431.08771.21771.34521.0221.2240.98230.96621.1064
DEPI 0.66730.65220.68760.78051.05571.10961.03911.01520.92310.8978
SGAI 1.13210.8250.78220.53150.45080.69620.62610.96260.98550.785
LVGI 2.6481.39581.15710.9150.94391.14230.97841.00830.55130.6818
TATA -0.1036-0.2142-0.1856-0.135-0.069-0.0445-0.0794-0.0723-0.0090.0031
M-score -2.24-3.32-2.86-2.54-2.58-2.57-3.08-3.22-2.30-2.02
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