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First Solar Inc (NAS:FSLR)
Beneish M-Score
-2.80 (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 -2.65 suggests that the company is not a manipulator.

FSLR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.85   Max: 3.01
Current: -2.8

-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 -1.98.


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 * 0.6001+0.528 * 0.82+0.404 * 1.2402+0.892 * 1.156+0.115 * 0.9548
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9787+4.679 * 0.0106-0.327 * 0.9633
=-2.65

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $570 Mil.
Revenue was 1271.245 + 896.217 + 469.209 + 1008.62 = $3,645 Mil.
Gross Profit was 484.365 + 164.483 + 38.981 + 310.546 = $998 Mil.
Total Current Assets was $3,251 Mil.
Total Assets was $7,061 Mil.
Property, Plant and Equipment(Net PPE) was $1,423 Mil.
Depreciation, Depletion and Amortization(DDA) was $257 Mil.
Selling, General & Admin. Expense(SGA) was $283 Mil.
Total Current Liabilities was $896 Mil.
Long-Term Debt was $247 Mil.
Net Income was 349.318 + 94.49 + -62.292 + 194.272 = $576 Mil.
Non Operating Income was -3.481 + -3.144 + -2.855 + -3.33 = $-13 Mil.
Cash Flow from Operations was 21.002 + -17.103 + -417.915 + 927.996 = $514 Mil.
Accounts Receivable was $822 Mil.
Revenue was 890.288 + 544.353 + 950.158 + 768.437 = $3,153 Mil.
Gross Profit was 189.402 + 92.725 + 236.711 + 189.296 = $708 Mil.
Total Current Assets was $3,253 Mil.
Total Assets was $6,440 Mil.
Property, Plant and Equipment(Net PPE) was $1,432 Mil.
Depreciation, Depletion and Amortization(DDA) was $245 Mil.
Selling, General & Admin. Expense(SGA) was $250 Mil.
Total Current Liabilities was $919 Mil.
Long-Term Debt was $164 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)
=(570.046 / 3645.291) / (821.696 / 3153.236)
=0.15637874 / 0.26058817
=0.6001

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)
=(164.483 / 3153.236) / (484.365 / 3645.291)
=0.22457374 / 0.27388074
=0.82

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 - (3251.329 + 1423.474) / 7060.642) / (1 - (3253.026 + 1432.33) / 6439.954)
=0.33790681 / 0.27245505
=1.2402

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
=3645.291 / 3153.236
=1.156

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))
=(244.525 / (244.525 + 1432.33)) / (256.582 / (256.582 + 1423.474))
=0.14582358 / 0.15272229
=0.9548

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)
=(283.34 / 3645.291) / (250.417 / 3153.236)
=0.07772768 / 0.07941588
=0.9787

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)
=((246.814 + 896.287) / 7060.642) / ((163.646 + 918.672) / 6439.954)
=0.1618976 / 0.168063
=0.9633

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
=(575.788 - -12.81 - 513.98) / 7060.642
=0.0106

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 -2.65 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 9.06960.1741.37362.21791.09070.93742.5240.70140.3151
GMI 0.85840.80560.91641.07671.09381.31571.38770.97091.0692
AQI 1.2615.26190.90933.27671.03410.74891.34370.79011.2515
SGI 2.80833.73392.47291.65791.24071.07911.21770.98231.025
DEPI 0.81031.00270.81630.56921.17830.85770.78051.01520.9977
SGAI 0.84480.58890.84260.83760.95871.2120.53150.96260.9254
LVGI 0.31880.95221.3850.62670.96121.77470.9151.00830.6818
TATA -0.0049-0.0352-0.0565-0.0111-0.0092-0.0013-0.135-0.0724-0.041
M-score 6.790.74-1.290.24-2.12-2.71-1.09-3.20-3.02

First Solar Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 4.44751.02120.70141.04410.32931.61190.31490.52751.57730.6001
GMI 1.01720.88270.97090.98191.05491.1911.06681.2241.1610.82
AQI 0.93640.94570.79011.1921.23211.00081.25151.02371.07971.2402
SGI 1.0221.2240.98230.96621.10640.87211.02550.83120.92511.156
DEPI 1.10961.03911.01520.92310.89780.98180.99770.99220.96520.9548
SGAI 0.69620.62610.96260.98550.7851.0540.92491.29151.29160.9787
LVGI 1.14230.97841.00830.55130.68180.6390.68180.99660.84670.9633
TATA -0.0445-0.0794-0.0724-0.0090.00270.0517-0.0405-0.0519-0.01750.0106
M-score 0.50-2.64-3.20-2.30-2.74-1.58-3.02-3.23-1.98-2.65
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