Switch to:
First Solar Inc (NAS:FSLR)
Beneish M-Score
-1.58 (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 -1.58 signals that the company is a manipulator.

FSLR' s 10-Year Beneish M-Score Range
Min: -3.85   Max: 3.01
Current: -1.58

-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 -1.85.


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 * 1.6124+0.528 * 1.1908+0.404 * 1.0008+0.892 * 0.8719+0.115 * 0.9818
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0543+4.679 * 0.0527-0.327 * 0.639
=-1.58

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $822 Mil.
Revenue was 889.31 + 544.353 + 950.158 + 768.437 = $3,152 Mil.
Gross Profit was 189.287 + 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.
Net Income was 88.424 + 4.528 + 112.007 + 65.26 = $270 Mil.
Non Operating Income was -6.652 + -3.149 + -2.325 + -2.263 = $-14 Mil.
Cash Flow from Operations was -47.211 + 118.38 + -318.176 + 192.206 = $-55 Mil.
Accounts Receivable was $585 Mil.
Revenue was 1265.587 + 519.76 + 755.205 + 1075.011 = $3,616 Mil.
Gross Profit was 364.034 + 140.098 + 169.326 + 293.547 = $967 Mil.
Total Current Assets was $3,597 Mil.
Total Assets was $6,863 Mil.
Property, Plant and Equipment(Net PPE) was $1,398 Mil.
Depreciation, Depletion and Amortization(DDA) was $234 Mil.
Selling, General & Admin. Expense(SGA) was $272 Mil.
Total Current Liabilities was $1,636 Mil.
Long-Term Debt was $169 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)
=(821.696 / 3152.258) / (584.514 / 3615.563)
=0.26066902 / 0.16166611
=1.6124

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)
=(92.725 / 3615.563) / (189.287 / 3152.258)
=0.26745627 / 0.22460693
=1.1908

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 - (3253.026 + 1432.33) / 6439.954) / (1 - (3596.566 + 1397.784) / 6862.71)
=0.27245505 / 0.27224814
=1.0008

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
=3152.258 / 3615.563
=0.8719

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))
=(233.569 / (233.569 + 1397.784)) / (244.525 / (244.525 + 1432.33))
=0.14317502 / 0.14582358
=0.9818

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)
=(250.417 / 3152.258) / (272.422 / 3615.563)
=0.07944052 / 0.07534705
=1.0543

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)
=((163.646 + 918.672) / 6439.954) / ((168.885 + 1636.186) / 6862.71)
=0.168063 / 0.26302598
=0.639

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
=(270.219 - -14.389 - -54.801) / 6439.954
=0.0527

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 -1.58 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 0.07039.06960.1741.37362.21791.09070.93742.5240.7014
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 -1.806.790.74-1.290.24-2.12-2.71-1.09-3.20

First Solar Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.19060.53232.5240.65064.44751.02120.70141.04410.32931.6124
GMI 1.59381.76321.38771.12251.01720.88270.97090.98191.05491.1908
AQI 0.95281.13431.34371.12320.93640.94570.79011.1921.23211.0008
SGI 1.24431.08771.21771.34521.0221.2240.98230.96621.10640.8719
DEPI 0.65220.68760.78051.05571.10961.03911.01520.92310.89780.9818
SGAI 0.8250.78220.53150.45080.69620.62610.96260.98550.7851.0543
LVGI 1.39581.15710.9150.94391.14230.97841.00830.55130.68180.639
TATA -0.2142-0.1856-0.135-0.069-0.0445-0.0794-0.0723-0.0090.00310.0527
M-score -3.85-3.29-1.09-2.580.50-2.64-3.20-2.30-2.74-1.58
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK