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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 10-Year Beneish M-Score Range
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 -1.93.


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 * 1.5781+0.528 * 1.1642+0.404 * 1.0797+0.892 * 0.9247+0.115 * 0.9652
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2922+4.679 * -0.0183-0.327 * 0.8467
=-1.99

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $347 Mil.
Revenue was 896.217 + 469.209 + 1007.993 + 889.31 = $3,263 Mil.
Gross Profit was 164.483 + 38.981 + 308.382 + 189.287 = $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.
Net Income was 94.49 + -62.292 + 191.959 + 88.424 = $313 Mil.
Non Operating Income was -3.144 + -2.855 + 3.906 + -6.652 = $-9 Mil.
Cash Flow from Operations was -17.103 + -417.915 + 927.996 + -47.211 = $446 Mil.
Accounts Receivable was $238 Mil.
Revenue was 544.353 + 950.158 + 768.437 + 1265.587 = $3,529 Mil.
Gross Profit was 92.725 + 236.711 + 189.296 + 364.034 = $883 Mil.
Total Current Assets was $3,170 Mil.
Total Assets was $6,612 Mil.
Property, Plant and Equipment(Net PPE) was $1,418 Mil.
Depreciation, Depletion and Amortization(DDA) was $245 Mil.
Selling, General & Admin. Expense(SGA) was $246 Mil.
Total Current Liabilities was $1,211 Mil.
Long-Term Debt was $134 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)
=(347.186 / 3262.729) / (237.924 / 3528.535)
=0.1064097 / 0.06742855
=1.5781

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)
=(38.981 / 3528.535) / (164.483 / 3262.729)
=0.25017918 / 0.21489158
=1.1642

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 - (3156.206 + 1399.464) / 6803.805) / (1 - (3170.269 + 1418.206) / 6612.015)
=0.3304232 / 0.30603984
=1.0797

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
=3262.729 / 3528.535
=0.9247

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))
=(244.622 / (244.622 + 1418.206)) / (251.643 / (251.643 + 1399.464))
=0.14711203 / 0.15240866
=0.9652

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)
=(294.36 / 3262.729) / (246.353 / 3528.535)
=0.09021895 / 0.06981736
=1.2922

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)
=((257.787 + 914.107) / 6803.805) / ((133.836 + 1211.243) / 6612.015)
=0.17224097 / 0.20342951
=0.8467

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
=(312.581 - -8.745 - 445.767) / 6803.805
=-0.0183

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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.07039.06960.1741.37362.21791.09070.93742.5240.70140.3151
GMI -1.14240.85840.80560.91641.07671.09381.31571.38770.97091.0692
AQI 3.07541.2615.26190.90933.27671.03410.74891.34370.79011.2515
SGI 3.55442.80833.73392.47291.65791.24071.07911.21770.98231.025
DEPI 1.4230.81031.00270.81630.56921.17830.85770.78051.01520.9977
SGAI 0.52340.84480.58890.84260.83760.95871.2120.53150.96260.9254
LVGI 1.34460.31880.95221.3850.62670.96121.77470.9151.00830.6818
TATA -0.0997-0.0049-0.0352-0.0565-0.0111-0.0092-0.0013-0.135-0.0724-0.041
M-score -1.806.790.74-1.290.24-2.12-2.71-1.09-3.20-3.02

First Solar Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.65064.44751.02120.70141.04410.32931.61240.31510.52781.5781
GMI 1.12251.01720.88270.97090.98191.05491.19081.06921.22771.1642
AQI 1.12320.93640.94570.79011.1921.23211.00081.25151.02371.0797
SGI 1.34521.0221.2240.98230.96621.10640.87191.0250.83070.9247
DEPI 1.05571.10961.03911.01520.92310.89780.98180.99770.99220.9652
SGAI 0.45080.69620.62610.96260.98550.7851.05430.92541.29221.2922
LVGI 0.94391.14230.97841.00830.55130.68180.6390.68180.99660.8467
TATA -0.069-0.0445-0.0794-0.0724-0.0090.00270.0524-0.0413-0.0527-0.0183
M-score -2.580.50-2.64-3.20-2.30-2.74-1.58-3.03-3.23-1.99
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