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Nuance Communications Inc (NAS:NUAN)
Beneish M-Score
-2.67 (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.

Nuance Communications Inc has a M-score of -2.67 suggests that the company is not a manipulator.

NUAN' s 10-Year Beneish M-Score Range
Min: -2.96   Max: 48.41
Current: -2.67

-2.96
48.41

During the past 13 years, the highest Beneish M-Score of Nuance Communications Inc was 48.41. The lowest was -2.96. And the median was -2.62.


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 Nuance Communications 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 * 1.0793+0.528 * 1.046+0.404 * 1.0374+0.892 * 1.0367+0.115 * 1.104
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9845+4.679 * -0.0756-0.327 * 0.9732
=-2.67

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $428 Mil.
Revenue was 502.314 + 475.504 + 475.653 + 469.98 = $1,923 Mil.
Gross Profit was 292.251 + 259.411 + 265.289 + 262.16 = $1,079 Mil.
Total Current Assets was $1,165 Mil.
Total Assets was $5,820 Mil.
Property, Plant and Equipment(Net PPE) was $191 Mil.
Depreciation, Depletion and Amortization(DDA) was $222 Mil.
Selling, General & Admin. Expense(SGA) was $609 Mil.
Total Current Liabilities was $642 Mil.
Long-Term Debt was $2,127 Mil.
Net Income was -1.456 + -54.247 + -39.227 + -55.413 = $-150 Mil.
Non Operating Income was -32.506 + 0.363 + -33.487 + -3.096 = $-69 Mil.
Cash Flow from Operations was 95.934 + 97.031 + 87.026 + 78.156 = $358 Mil.
Accounts Receivable was $383 Mil.
Revenue was 472.243 + 469.769 + 450.999 + 462.268 = $1,855 Mil.
Gross Profit was 273.508 + 275.711 + 259.814 + 279.696 = $1,089 Mil.
Total Current Assets was $1,410 Mil.
Total Assets was $5,959 Mil.
Property, Plant and Equipment(Net PPE) was $143 Mil.
Depreciation, Depletion and Amortization(DDA) was $209 Mil.
Selling, General & Admin. Expense(SGA) was $597 Mil.
Total Current Liabilities was $805 Mil.
Long-Term Debt was $2,108 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)
=(428.266 / 1923.451) / (382.741 / 1855.279)
=0.22265501 / 0.20629835
=1.0793

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)
=(259.411 / 1855.279) / (292.251 / 1923.451)
=0.58682764 / 0.56102859
=1.046

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 - (1164.5 + 191.411) / 5820.284) / (1 - (1409.527 + 143.465) / 5958.603)
=0.76703697 / 0.73936978
=1.0374

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
=1923.451 / 1855.279
=1.0367

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))
=(208.659 / (208.659 + 143.465)) / (221.776 / (221.776 + 191.411))
=0.5925725 / 0.53674486
=1.104

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)
=(609.207 / 1923.451) / (596.838 / 1855.279)
=0.31672603 / 0.32169717
=0.9845

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)
=((2127.392 + 642.009) / 5820.284) / ((2108.091 + 805.234) / 5958.603)
=0.47581888 / 0.48892752
=0.9732

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
=(-150.343 - -68.726 - 358.147) / 5820.284
=-0.0756

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.

Nuance Communications Inc has a M-score of -2.67 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 own currency.

Nuance Communications Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
DSRI 0.95551.12271.03690.72060.87490.91561.05661.0870.89331.0793
GMI 1.14831.02081.02581.05431.02390.98031.02120.97991.07991.046
AQI 1.0041.01581.0351.01770.94361.00391.01560.88921.07691.0374
SGI 1.71631.67181.54951.44261.09431.17741.17861.25231.12341.0367
DEPI 1.2281.0050.97580.83740.95190.99731.04481.11171.04141.104
SGAI 0.9920.98910.91490.89710.89790.99540.99220.93650.99770.9845
LVGI 1.71562.11651.16980.84210.83360.87560.99111.4361.04990.9732
TATA -0.0282-0.0564-0.0554-0.0792-0.0795-0.0852-0.0806-0.0497-0.0841-0.0644
M-score -2.14-2.38-2.23-2.63-2.83-2.77-2.62-2.58-2.80-2.61

Nuance Communications Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.09621.0870.98360.93910.95220.89330.97660.99991.02561.0793
GMI 0.98810.97990.99341.03121.05221.07991.09171.07361.07271.046
AQI 0.9940.88921.02981.05040.95561.07691.03631.03450.99071.0374
SGI 1.22851.25231.27451.25351.19491.12341.06271.04071.02241.0367
DEPI 1.0861.11171.07061.06431.04471.04140.99931.00241.01711.104
SGAI 0.95360.93650.96390.95580.97170.99770.9831.02161.00590.9845
LVGI 1.24381.4361.19881.17861.21061.04991.02931.02871.0080.9732
TATA -0.0763-0.0497-0.0564-0.0588-0.0672-0.0841-0.0819-0.0778-0.0823-0.0756
M-score -2.62-2.58-2.56-2.59-2.71-2.80-2.77-2.77-2.79-2.67
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