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GuruFocus has detected 3 Warning Signs with Natures Sunshine Products Inc $NATR.
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Natures Sunshine Products Inc (NAS:NATR)
Beneish M-Score
-2.52 (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.

Natures Sunshine Products Inc has a M-score of -2.52 suggests that the company is not a manipulator.

NATR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.27   Max: -1.7
Current: -2.52

-3.27
-1.7

During the past 13 years, the highest Beneish M-Score of Natures Sunshine Products Inc was -1.70. The lowest was -3.27. And the median was -2.63.


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 Natures Sunshine Products 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 * 0.9565+0.528 * 1.0051+0.404 * 1.0367+0.892 * 1.0507+0.115 * 1.0032
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0138+4.679 * -0.0025-0.327 * 1.1572
=-2.52

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

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $7.7 Mil.
Revenue was 83.95 + 85.441 + 89.366 + 82.402 = $341.2 Mil.
Gross Profit was 59.623 + 63.929 + 66.288 + 60.382 = $250.2 Mil.
Total Current Assets was $100.1 Mil.
Total Assets was $205.6 Mil.
Property, Plant and Equipment(Net PPE) was $73.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.8 Mil.
Selling, General & Admin. Expense(SGA) was $240.2 Mil.
Total Current Liabilities was $63.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -6.653 + 4.155 + 2.568 + 2.069 = $2.1 Mil.
Non Operating Income was -1.73 + 0.02 + -0.622 + 1.559 = $-0.8 Mil.
Cash Flow from Operations was -1.645 + -1.401 + 3.601 + 2.862 = $3.4 Mil.
Accounts Receivable was $7.7 Mil.
Revenue was 79.994 + 79.586 + 81.247 + 83.878 = $324.7 Mil.
Gross Profit was 58.241 + 58.943 + 60.179 + 61.997 = $239.4 Mil.
Total Current Assets was $101.5 Mil.
Total Assets was $200.5 Mil.
Property, Plant and Equipment(Net PPE) was $68.7 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.5 Mil.
Selling, General & Admin. Expense(SGA) was $225.5 Mil.
Total Current Liabilities was $53.1 Mil.
Long-Term Debt was $0.0 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)
=(7.738 / 341.159) / (7.7 / 324.705)
=0.02268151 / 0.02371383
=0.9565

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)
=(239.36 / 324.705) / (250.222 / 341.159)
=0.73716142 / 0.73344687
=1.0051

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 - (100.121 + 73.272) / 205.57) / (1 - (101.518 + 68.728) / 200.52)
=0.15652576 / 0.15097746
=1.0367

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
=341.159 / 324.705
=1.0507

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))
=(4.525 / (4.525 + 68.728)) / (4.808 / (4.808 + 73.272))
=0.06177221 / 0.06157787
=1.0032

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)
=(240.183 / 341.159) / (225.488 / 324.705)
=0.70402071 / 0.69443957
=1.0138

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)
=((0 + 63.035) / 205.57) / ((0 + 53.136) / 200.52)
=0.30663521 / 0.26499102
=1.1572

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
=(2.139 - -0.773 - 3.417) / 205.57
=-0.0025

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.

Natures Sunshine Products Inc has a M-score of -2.52 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 local exchange's currency.

Natures Sunshine Products Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.14841.42220.83890.7011.57860.99311.03570.66581.29050.9565
GMI 1.00480.99871.00961.07360.98411.01360.99531.00041.01741.0051
AQI 1.59180.92951.05450.96050.90980.73170.89431.29251.22741.0367
SGI 1.01221.0180.91661.02281.05110.9811.02490.99060.88631.0507
DEPI 0.91541.21171.12661.00670.90911.16131.04031.54771.28021.0032
SGAI 2.070.9930.96340.93360.98510.931.05151.01670.99491.0138
LVGI 0.88561.0190.91640.94051.17040.68611.1990.74760.90061.1572
TATA -0.1278-0.01040.0268-0.12450.0752-0.008-0.0659-0.02230.03230.0003
M-score -2.85-2.13-2.50-3.26-1.66-2.51-2.85-2.64-2.00-2.51

Natures Sunshine Products Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.84060.66580.7230.81730.88241.29051.1121.19510.96890.9565
GMI 0.98911.00041.01081.01431.02461.01741.01321.00780.99911.0051
AQI 1.11071.29251.06541.01181.17861.22741.21311.231.08351.0367
SGI 1.00160.99060.97260.94320.90310.88630.9060.95991.01761.0507
DEPI 1.37031.54771.69581.61741.53921.28021.07520.99350.98491.0032
SGAI 1.041.01671.00991.00720.99940.99491.00921.00280.9971.0138
LVGI 0.7450.74760.77440.79570.91660.90061.06061.06261.10831.1572
TATA -0.0249-0.021-0.0336-0.0192-0.00760.0255-0.0197-0.01450.021-0.0025
M-score -2.58-2.63-2.73-2.64-2.54-2.03-2.47-2.33-2.40-2.52
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