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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.
During the past 13 years, the highest Beneish M-Score of Natures Sunshine Products Inc was -1.66. The lowest was -3.40. And the median was -2.57.
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 * 0.8255||+||0.528 * 0.991||+||0.404 * 1.1107||+||0.892 * 1.02||+||0.115 * 1.3703|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0477||+||4.679 * -0.0099||-||0.327 * 0.745|
|This Year (Sep14) TTM:||Last Year (Sep13) TTM:|
|Accounts Receivable was $9.2 Mil.|
Revenue was 94.876 + 94.325 + 95.753 + 95.484 = $380.4 Mil.
Gross Profit was 71.561 + 70.953 + 72.647 + 71.4 = $286.6 Mil.
Total Current Assets was $139.5 Mil.
Total Assets was $209.1 Mil.
Property, Plant and Equipment(Net PPE) was $45.4 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.7 Mil.
Selling, General & Admin. Expense(SGA) was $268.4 Mil.
Total Current Liabilities was $60.0 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was 1.017 + 3.234 + 9.665 + 1.843 = $15.8 Mil.
Non Operating Income was -1.279 + -0.378 + -1.115 + -0.289 = $-3.1 Mil.
Cash Flow from Operations was 5.403 + 7.648 + 0.49 + 7.349 = $20.9 Mil.
|Accounts Receivable was $10.9 Mil.
Revenue was 92.458 + 93.675 + 96.479 + 90.377 = $373.0 Mil.
Gross Profit was 68.803 + 71.045 + 72.034 + 66.536 = $278.4 Mil.
Total Current Assets was $145.4 Mil.
Total Assets was $195.1 Mil.
Property, Plant and Equipment(Net PPE) was $29.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.3 Mil.
Selling, General & Admin. Expense(SGA) was $251.1 Mil.
Total Current Liabilities was $65.1 Mil.
Long-Term Debt was $10.0 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)|
|=||(9.184 / 380.438)||/||(10.908 / 372.989)|
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)|
|=||(70.953 / 372.989)||/||(71.561 / 380.438)|
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 - (139.538 + 45.373) / 209.126)||/||(1 - (145.402 + 29.347) / 195.087)|
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))|
|=||(4.329 / (4.329 + 29.347))||/||(4.697 / (4.697 + 45.373))|
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)|
|=||(268.356 / 380.438)||/||(251.126 / 372.989)|
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 + 60.002) / 209.126)||/||((10 + 65.13) / 195.087)|
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|
|=||(15.759 - -3.061||-||20.89)||/||209.126|
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 -2.51 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