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Applied Optoelectronics Beneish M-Score

: -2.68 (As of Today)
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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.68 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

NAS:AAOI' s Beneish M-Score Range Over the Past 10 Years
Min: -3.43   Med: -2.41   Max: -1.47
Current: -2.68
-3.43
-1.47

During the past 10 years, the highest Beneish M-Score of Applied Optoelectronics was -1.47. The lowest was -3.43. And the median was -2.41.

Applied Optoelectronics Beneish M-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Applied Optoelectronics Annual Data
Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1.61 -2.19 -2.45 -2.96 -3.05

Applied Optoelectronics Quarterly Data
Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20
Beneish M-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -2.55 -3.05 -3.43 -2.49 -2.68
Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

Applied Optoelectronics Beneish M-Score Distribution

* The bar in red indicates where Applied Optoelectronics's Beneish M-Score falls into.


Applied Optoelectronics Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 Applied Optoelectronics 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 * 1.5015+0.528 * 1.0349+0.404 * 0.2488+0.892 * 1.1534+0.115 * 1.072
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9523+4.679 * -0.0954-0.327 * 1.2452
=-2.68

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep20) TTM:Last Year (Sep19) TTM:
Accounts Receivable was $51.5 Mil.
Revenue was 76.608 + 65.222 + 40.467 + 48.658 = $231.0 Mil.
Gross Profit was 19.19 + 13.736 + 6.338 + 11.336 = $50.6 Mil.
Total Current Assets was $229.9 Mil.
Total Assets was $497.8 Mil.
Property, Plant and Equipment(Net PPE) was $257.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $24.4 Mil.
Selling, General, & Admin. Expense(SGA) was $55.2 Mil.
Total Current Liabilities was $132.3 Mil.
Long-Term Debt & Capital Lease Obligation was $100.3 Mil.
Net Income was -9.616 + -18.6 + -16.797 + -35.429 = $-80.4 Mil.
Non Operating Income was 0.019 + 0.098 + 0.151 + -0.156 = $0.1 Mil.
Cash Flow from Operations was -6.136 + -15.523 + -8.246 + -3.165 = $-33.1 Mil.
 Accounts Receivable was $29.7 Mil.
Revenue was 46.084 + 43.411 + 52.719 + 58.018 = $200.2 Mil.
Gross Profit was 11.976 + 10.538 + 12.351 + 10.537 = $45.4 Mil.
Total Current Assets was $190.6 Mil.
Total Assets was $483.9 Mil.
Property, Plant and Equipment(Net PPE) was $253.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $25.9 Mil.
Selling, General, & Admin. Expense(SGA) was $50.2 Mil.
Total Current Liabilities was $64.4 Mil.
Long-Term Debt & Capital Lease Obligation was $117.2 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Accounts Receivable 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)
=(51.453 / 230.955) / (29.709 / 200.232)
=0.22278366 / 0.14837289
=1.5015

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)
=(45.402 / 200.232) / (50.6 / 230.955)
=0.22674697 / 0.2190903
=1.0349

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 Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (229.93 + 257.628) / 497.787) / (1 - (190.647 + 253.273) / 483.878)
=0.02054895 / 0.08257867
=0.2488

4. SGI = Sales Growth Index

Ratio of Revenue 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
=230.955 / 200.232
=1.1534

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
=(25.873 / (25.873 + 253.273)) / (24.382 / (24.382 + 257.628))
=0.09268626 / 0.08645793
=1.072

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
=(55.171 / 230.955) / (50.228 / 200.232)
=0.23888203 / 0.25084902
=0.9523

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 in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((100.303 + 132.318) / 497.787) / ((117.17 + 64.423) / 483.878)
=0.46731032 / 0.37528675
=1.2452

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
=(-80.442 - 0.112 - -33.07) / 497.787
=-0.0954

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Applied Optoelectronics has a M-score of -2.68 suggests that the company is unlikely to be a manipulator.

Applied Optoelectronics Beneish M-Score Headlines

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