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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 -2.84 suggests that the company is not a manipulator.
During the past 13 years, the highest Beneish M-Score of Natures Sunshine Products, Inc. was -1.66. The lowest was -3.26. And the median was -2.64.
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 * 1.0317||+||0.528 * 0.9957||+||0.404 * 0.8943||+||0.892 * 1.0289||+||0.115 * 1.0403|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0492||+||4.679 * -0.0652||-||0.327 * 1.199|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $10.2 Mil.|
Revenue was 95.484 + 92.458 + 93.675 + 96.479 = $378.1 Mil.
Gross Profit was 71.4 + 68.803 + 71.045 + 72.034 = $283.3 Mil.
Total Current Assets was $148.6 Mil.
Total Assets was $199.6 Mil.
Property, Plant and Equipment(Net PPE) was $32.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.5 Mil.
Selling, General & Admin. Expense(SGA) was $259.2 Mil.
Total Current Liabilities was $68.6 Mil.
Long-Term Debt was $10.0 Mil.
Net Income was 1.843 + 4.85 + 6.052 + 4.864 = $17.6 Mil.
Non Operating Income was -0.289 + -0.269 + 1.482 + 0.33 = $1.3 Mil.
Cash Flow from Operations was 7.349 + 6.743 + 7.463 + 7.823 = $29.4 Mil.
|Accounts Receivable was $9.6 Mil.
Revenue was 90.377 + 91.232 + 92.991 + 92.868 = $367.5 Mil.
Gross Profit was 66.536 + 68.088 + 70.381 + 69.139 = $274.1 Mil.
Total Current Assets was $145.3 Mil.
Total Assets was $193.9 Mil.
Property, Plant and Equipment(Net PPE) was $28.0 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.1 Mil.
Selling, General & Admin. Expense(SGA) was $240.1 Mil.
Total Current Liabilities was $61.4 Mil.
Long-Term Debt was $2.3 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(10.206 / 378.096)||/||(9.614 / 367.468)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(68.803 / 367.468)||/||(71.4 / 378.096)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (148.594 + 32.022) / 199.612)||/||(1 - (145.333 + 27.95) / 193.919)|
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.
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))|
|=||(4.078 / (4.078 + 27.95))||/||(4.466 / (4.466 + 32.022))|
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)|
|=||(259.225 / 378.096)||/||(240.128 / 367.468)|
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)|
|=||((10 + 68.569) / 199.612)||/||((2.27 + 61.39) / 193.919)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(17.609 - 1.254||-||29.378)||/||199.612|
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 -2.84 suggests that the company will not be a manipulator.
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
Natures Sunshine Products, Inc. Annual Data
Natures Sunshine Products, Inc. Quarterly Data