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First Solar Inc (NAS:FSLR)
Beneish M-Score
-1.99 (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 -1.99 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: -1.99

-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 -1.97.


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 * 0.8683+0.528 * 0.734+0.404 * 1.1186+0.892 * 1.2245+0.115 * 1.2023
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.6967+4.679 * 0.082-0.327 * 0.8572
=-1.99

* 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 $369 Mil.
Revenue was 934.381 + 848.484 + 942.324 + 1271.245 = $3,996 Mil.
Gross Profit was 191.165 + 262.945 + 231.438 + 484.365 = $1,170 Mil.
Total Current Assets was $3,077 Mil.
Total Assets was $7,544 Mil.
Property, Plant and Equipment(Net PPE) was $1,679 Mil.
Depreciation, Depletion and Amortization(DDA) was $244 Mil.
Selling, General & Admin. Expense(SGA) was $251 Mil.
Total Current Liabilities was $952 Mil.
Long-Term Debt was $162 Mil.
Net Income was 13.408 + 170.565 + 164.135 + 349.318 = $697 Mil.
Non Operating Income was 4.03 + 32.313 + -3.66 + -3.481 = $29 Mil.
Cash Flow from Operations was -75.275 + 50.494 + 53.097 + 21.002 = $49 Mil.
Accounts Receivable was $347 Mil.
Revenue was 896.217 + 469.209 + 1007.993 + 890.288 = $3,264 Mil.
Gross Profit was 164.483 + 38.981 + 308.382 + 189.402 = $701 Mil.
Total Current Assets was $3,156 Mil.
Total Assets was $6,804 Mil.
Property, Plant and Equipment(Net PPE) was $1,399 Mil.
Depreciation, Depletion and Amortization(DDA) was $252 Mil.
Selling, General & Admin. Expense(SGA) was $294 Mil.
Total Current Liabilities was $914 Mil.
Long-Term Debt was $258 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)
=(369.135 / 3996.434) / (347.186 / 3263.707)
=0.09236609 / 0.10637781
=0.8683

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)
=(701.248 / 3263.707) / (1169.913 / 3996.434)
=0.21486242 / 0.29273923
=0.734

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 - (3076.621 + 1679.026) / 7544.02) / (1 - (3156.206 + 1399.464) / 6803.805)
=0.36961368 / 0.3304232
=1.1186

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
=3996.434 / 3263.707
=1.2245

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))
=(251.643 / (251.643 + 1399.464)) / (243.747 / (243.747 + 1679.026))
=0.15240866 / 0.12676847
=1.2023

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)
=(251.135 / 3996.434) / (294.36 / 3263.707)
=0.06283977 / 0.09019192
=0.6967

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)
=((161.839 + 952.029) / 7544.02) / ((257.787 + 914.107) / 6803.805)
=0.14764913 / 0.17224097
=0.8572

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
=(697.426 - 29.202 - 49.318) / 7544.02
=0.082

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 -1.99 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 9.06960.1741.37362.21791.09070.93742.5240.70130.2013.5025
GMI 0.85840.80560.91641.07671.09381.31571.38770.9691.07390.9471
AQI 1.2615.26190.90933.27671.03410.74891.34370.79011.30721.0941
SGI 2.80833.73392.47291.65791.24071.07911.21770.98251.02461.0554
DEPI 0.81031.00270.81630.56921.17830.85770.78051.01521.00810.9108
SGAI 0.84480.58890.84260.83760.95871.2120.53150.96240.92570.9952
LVGI 0.31880.95221.3850.62670.96121.77470.9151.00830.68010.9578
TATA -0.0049-0.0352-0.0565-0.0111-0.0092-0.0013-0.135-0.0728-0.04150.1257
M-score 6.790.74-1.290.24-2.12-2.71-1.09-3.21-3.110.47

First Solar Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.31860.32921.61160.20091.72891.57790.60033.50420.76560.8683
GMI 0.98011.05291.1881.07151.23021.16660.82360.94930.74850.734
AQI 1.1921.23211.00081.30721.02371.07971.24021.09411.21971.1186
SGI 0.96631.10660.87231.02510.83090.92481.15561.05491.35941.2245
DEPI 0.92310.89780.98181.00810.99220.96520.95480.91080.96471.2023
SGAI 0.98530.78481.05380.92531.2921.29210.97910.99570.71030.6967
LVGI 0.55130.68180.6390.68010.99660.84670.96330.95780.94330.8572
TATA -0.00950.00230.0512-0.041-0.0514-0.0180.01010.12570.08480.082
M-score -2.97-2.74-1.59-3.10-2.12-1.98-2.650.48-1.96-1.99
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