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GuruFocus has detected 1 Warning Sign with Natures Sunshine Products Inc $NATR.
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Natures Sunshine Products Inc (NAS:NATR)
Beneish M-Score
-2.40 (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 -2.40 suggests that the company is not a manipulator.

NATR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.44   Max: -1.7
Current: -2.4

-3.44
-1.7

During the past 13 years, the highest Beneish M-Score of Natures Sunshine Products Inc was -1.70. The lowest was -3.44. And the median was -2.57.


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 * 0.9689+0.528 * 0.9991+0.404 * 1.0835+0.892 * 1.0176+0.115 * 0.9849
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.997+4.679 * 0.021-0.327 * 1.1083
=-2.40

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

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $7.2 Mil.
Revenue was 85.441 + 89.366 + 82.402 + 79.994 = $337.2 Mil.
Gross Profit was 63.929 + 66.288 + 60.382 + 58.241 = $248.8 Mil.
Total Current Assets was $110.2 Mil.
Total Assets was $214.9 Mil.
Property, Plant and Equipment(Net PPE) was $72.9 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.8 Mil.
Selling, General & Admin. Expense(SGA) was $235.2 Mil.
Total Current Liabilities was $62.6 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 4.155 + 2.568 + 2.069 + 3.693 = $12.5 Mil.
Non Operating Income was 0.02 + -0.622 + 1.559 + -0.025 = $0.9 Mil.
Cash Flow from Operations was -1.401 + 3.601 + 2.862 + 1.984 = $7.0 Mil.
Accounts Receivable was $7.3 Mil.
Revenue was 79.586 + 81.247 + 83.878 + 86.663 = $331.4 Mil.
Gross Profit was 58.943 + 60.179 + 61.997 + 63.195 = $244.3 Mil.
Total Current Assets was $104.8 Mil.
Total Assets was $196.7 Mil.
Property, Plant and Equipment(Net PPE) was $65.1 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.2 Mil.
Selling, General & Admin. Expense(SGA) was $231.8 Mil.
Total Current Liabilities was $51.7 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)
=(7.216 / 337.203) / (7.319 / 331.374)
=0.02139957 / 0.02208683
=0.9689

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)
=(244.314 / 331.374) / (248.84 / 337.203)
=0.73727571 / 0.7379531
=0.9991

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 - (110.201 + 72.921) / 214.899) / (1 - (104.759 + 65.083) / 196.683)
=0.14786946 / 0.13646833
=1.0835

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
=337.203 / 331.374
=1.0176

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))
=(4.224 / (4.224 + 65.083)) / (4.81 / (4.81 + 72.921))
=0.06094622 / 0.06188007
=0.9849

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)
=(235.194 / 337.203) / (231.828 / 331.374)
=0.6974849 / 0.69959623
=0.997

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 + 62.637) / 214.899) / ((0 + 51.727) / 196.683)
=0.29147181 / 0.2629968
=1.1083

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
=(12.485 - 0.932 - 7.046) / 214.899
=0.021

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 -2.40 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.74851.14841.42220.83890.7011.57860.99311.03570.66581.2905
GMI 0.9971.00480.99871.00961.07360.98411.01360.99531.00041.0174
AQI 1.00161.59180.92951.05450.96050.90980.73170.89431.29251.2274
SGI 1.031.01221.0180.91661.02281.05110.9811.02490.99060.8863
DEPI 0.88020.91541.21171.12661.00670.90911.16131.04031.54771.2802
SGAI 1.05612.070.9930.96340.93360.98510.931.05151.01670.9949
LVGI 1.11230.88561.0190.91640.94051.17040.68611.1990.74760.9006
TATA -0.1195-0.1278-0.01040.0268-0.12450.0752-0.008-0.0659-0.02230.0323
M-score -3.30-2.85-2.13-2.50-3.26-1.66-2.51-2.85-2.64-2.00

Natures Sunshine Products Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.98740.84060.66580.7230.81730.88241.29051.1121.19510.9689
GMI 0.99390.98911.00041.01081.01431.02461.01741.01321.00780.9991
AQI 1.21061.11071.29251.06541.01181.17861.22741.21311.231.0835
SGI 1.00231.00160.99060.97260.94320.90310.88630.9060.95991.0176
DEPI 1.28531.37031.54771.69581.61741.53921.28021.07520.99350.9849
SGAI 1.03841.041.01671.00991.00720.99940.99491.00921.00280.997
LVGI 1.09560.7450.74760.77440.79570.91660.90061.06061.06261.1083
TATA -0.0121-0.0249-0.021-0.0336-0.0192-0.00760.0255-0.0197-0.01450.021
M-score -2.47-2.58-2.63-2.73-2.64-2.54-2.03-2.47-2.33-2.40
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