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First Solar, Inc. (NAS:FSLR)
Beneish M-Score
-3.22 (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 -3.22 suggests that the company is not a manipulator.

FSLR' s 10-Year Beneish M-Score Range
Min: -3.22   Max: 0.29
Current: -3.22

-3.22
0.29

During the past 13 years, the highest Beneish M-Score of First Solar, Inc. was 0.29. The lowest was -3.22. 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 * 0.6886+0.528 * 0.9709+0.404 * 0.7901+0.892 * 0.9823+0.115 * 1.0152
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9626+4.679 * -0.0723-0.327 * 1.0083
=-3.22

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $658 Mil.
Revenue was 768.437 + 1265.587 + 519.76 + 755.205 = $3,309 Mil.
Gross Profit was 189.296 + 364.034 + 140.098 + 169.326 = $863 Mil.
Total Current Assets was $3,793 Mil.
Total Assets was $6,884 Mil.
Property, Plant and Equipment(Net PPE) was $1,385 Mil.
Depreciation, Depletion and Amortization(DDA) was $234 Mil.
Selling, General & Admin. Expense(SGA) was $273 Mil.
Total Current Liabilities was $1,588 Mil.
Long-Term Debt was $163 Mil.
Net Income was 65.26 + 195.038 + 33.598 + 59.142 = $353 Mil.
Non Operating Income was -2.263 + -3.138 + -0.564 + 0.785 = $-5 Mil.
Cash Flow from Operations was 192.206 + 375.092 + 222.373 + 66.455 = $856 Mil.
Accounts Receivable was $972 Mil.
Revenue was 1075.011 + 839.147 + 957.332 + 497.055 = $3,369 Mil.
Gross Profit was 293.547 + 238.716 + 243.741 + 76.745 = $853 Mil.
Total Current Assets was $2,832 Mil.
Total Assets was $6,349 Mil.
Property, Plant and Equipment(Net PPE) was $1,525 Mil.
Depreciation, Depletion and Amortization(DDA) was $263 Mil.
Selling, General & Admin. Expense(SGA) was $289 Mil.
Total Current Liabilities was $1,101 Mil.
Long-Term Debt was $500 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)
=(657.706 / 3308.989) / (972.279 / 3368.545)
=0.19876343 / 0.28863471
=0.6886

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)
=(364.034 / 3368.545) / (189.296 / 3308.989)
=0.25315054 / 0.26073039
=0.9709

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 - (3792.764 + 1385.084) / 6883.502) / (1 - (2832.324 + 1525.382) / 6348.692)
=0.2477887 / 0.3136057
=0.7901

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
=3308.989 / 3368.545
=0.9823

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))
=(262.716 / (262.716 + 1525.382)) / (234.37 / (234.37 + 1385.084))
=0.14692483 / 0.14472162
=1.0152

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)
=(273.029 / 3308.989) / (288.751 / 3368.545)
=0.0825113 / 0.0857198
=0.9626

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)
=((162.78 + 1588.061) / 6883.502) / ((500.223 + 1101.374) / 6348.692)
=0.25435323 / 0.25227196
=1.0083

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
=(353.038 - -5.18 - 856.126) / 6883.502
=-0.0723

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 -3.22 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.

First Solar, Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.070317.9930.26090.46172.21791.09072.54750.9460.6886
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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.6612.54752.20930.76941.00630.9460.65061.1020.54020.6886
GMI 1.06871.31571.55021.59381.76321.38771.12251.01720.88270.9709
AQI 0.79440.74890.68650.95281.13431.34371.12320.93640.94570.7901
SGI 1.04651.07911.05191.24431.08771.21771.34521.0221.2240.9823
DEPI 1.06290.85770.66730.65220.68760.78051.04951.09751.03911.0152
SGAI 1.19031.2121.13210.8250.78220.53150.45080.69620.62610.9626
LVGI 1.43241.77472.6481.39581.15710.9150.94391.14230.97841.0083
TATA 0.0381-0.0013-0.1036-0.2142-0.1856-0.135-0.069-0.0445-0.0794-0.0723
M-score -1.87-1.23-2.24-3.32-2.86-2.54-2.58-2.57-3.08-3.22
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