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First Solar Inc (NAS:FSLR)
Beneish M-Score
-3.02 (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 -3.02 suggests that the company is not a manipulator.

FSLR' s 10-Year Beneish M-Score Range
Min: -3.2   Max: 0.23
Current: -3.02

-3.2
0.23

During the past 13 years, the highest Beneish M-Score of First Solar Inc was 0.23. The lowest was -3.20. And the median was -1.70.


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 * 0.3151+0.528 * 1.0692+0.404 * 1.2515+0.892 * 1.025+0.115 * 0.9977
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9254+4.679 * -0.041-0.327 * 0.6818
=-3.02

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $212 Mil.
Revenue was 1007.993 + 889.31 + 544.353 + 950.158 = $3,392 Mil.
Gross Profit was 308.382 + 189.287 + 92.725 + 236.711 = $827 Mil.
Total Current Assets was $3,190 Mil.
Total Assets was $6,724 Mil.
Property, Plant and Equipment(Net PPE) was $1,449 Mil.
Depreciation, Depletion and Amortization(DDA) was $246 Mil.
Selling, General & Admin. Expense(SGA) was $259 Mil.
Total Current Liabilities was $1,001 Mil.
Long-Term Debt was $165 Mil.
Net Income was 191.959 + 88.424 + 4.528 + 112.007 = $397 Mil.
Non Operating Income was 3.906 + -6.652 + -3.149 + -2.325 = $-8 Mil.
Cash Flow from Operations was 927.996 + -47.211 + 118.38 + -318.176 = $681 Mil.
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.



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)
=(212.405 / 3391.814) / (657.706 / 3308.989)
=0.06262283 / 0.19876343
=0.3151

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)
=(189.287 / 3308.989) / (308.382 / 3391.814)
=0.26073039 / 0.24385329
=1.0692

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 - (3190.466 + 1448.697) / 6724.439) / (1 - (3792.764 + 1385.084) / 6883.502)
=0.31010408 / 0.2477887
=1.2515

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
=3391.814 / 3308.989
=1.025

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))
=(234.37 / (234.37 + 1385.084)) / (245.798 / (245.798 + 1448.697))
=0.14472162 / 0.14505679
=0.9977

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)
=(258.973 / 3391.814) / (273.029 / 3308.989)
=0.07635236 / 0.0825113
=0.9254

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)
=((165.003 + 1001.096) / 6724.439) / ((162.78 + 1588.061) / 6883.502)
=0.17341209 / 0.25435323
=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
=(396.918 - -8.22 - 680.989) / 6724.439
=-0.041

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 -3.02 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.53232.5240.65064.44751.02120.70141.04410.32931.61240.3151
GMI 1.76321.38771.12251.01720.88270.97090.98191.05491.19081.0692
AQI 1.13431.34371.12320.93640.94570.79011.1921.23211.00081.2515
SGI 1.08771.21771.34521.0221.2240.98230.96621.10640.87191.025
DEPI 0.68760.78051.05571.10961.03911.01520.92310.89780.98180.9977
SGAI 0.78220.53150.45080.69620.62610.96260.98550.7851.05430.9254
LVGI 1.15710.9150.94391.14230.97841.00830.55130.68180.6390.6818
TATA -0.1856-0.135-0.069-0.0445-0.0794-0.0724-0.0090.0030.0527-0.041
M-score -3.29-1.09-2.580.50-2.64-3.20-2.30-2.74-1.58-3.02
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