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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 -3.26. 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 * 0.6658||+||0.528 * 1.0004||+||0.404 * 1.2925||+||0.892 * 0.9906||+||0.115 * 1.5477|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0167||+||4.679 * -0.0223||-||0.327 * 0.7476|
|This Year (Dec14) TTM:||Last Year (Dec13) TTM:|
|Accounts Receivable was $6.7 Mil.|
Revenue was 81.413 + 94.876 + 94.325 + 95.753 = $366.4 Mil.
Gross Profit was 59.622 + 71.561 + 70.953 + 72.647 = $274.8 Mil.
Total Current Assets was $121.2 Mil.
Total Assets was $196.8 Mil.
Property, Plant and Equipment(Net PPE) was $51.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $4.4 Mil.
Selling, General & Admin. Expense(SGA) was $255.7 Mil.
Total Current Liabilities was $57.9 Mil.
Long-Term Debt was $0.0 Mil.
Net Income was -3.897 + 1.017 + 3.234 + 9.665 = $10.0 Mil.
Non Operating Income was 2.997 + -1.279 + -0.378 + -1.115 = $0.2 Mil.
Cash Flow from Operations was 0.641 + 5.403 + 7.648 + 0.49 = $14.2 Mil.
|Accounts Receivable was $10.2 Mil.
Revenue was 87.214 + 92.458 + 93.675 + 96.479 = $369.8 Mil.
Gross Profit was 65.6 + 68.803 + 71.045 + 72.034 = $277.5 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 $253.9 Mil.
Total Current Liabilities was $68.6 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)|
|=||(6.732 / 366.367)||/||(10.206 / 369.826)|
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)|
|=||(71.561 / 369.826)||/||(59.622 / 366.367)|
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 - (121.249 + 51.343) / 196.799)||/||(1 - (148.594 + 32.022) / 199.612)|
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))|
|=||(4.466 / (4.466 + 32.022))||/||(4.409 / (4.409 + 51.343))|
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)|
|=||(255.735 / 366.367)||/||(253.899 / 369.826)|
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 + 57.909) / 196.799)||/||((10 + 68.569) / 199.612)|
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|
|=||(10.019 - 0.225||-||14.182)||/||196.799|
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 -2.64 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