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Nuance Communications Inc (NAS:NUAN)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

NUAN' s 10-Year Beneish M-Score Range
Min: -5.07   Max: 74.31
Current: -2.79

-5.07
74.31

During the past 13 years, the highest Beneish M-Score of Nuance Communications Inc was 74.31. The lowest was -5.07. And the median was -2.58.


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 * 0.9999+0.528 * 1.0736+0.404 * 1.0345+0.892 * 1.0407+0.115 * 1.0024
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0165+4.679 * -0.0834-0.327 * 1.0287
=-2.79

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $388 Mil.
Revenue was 475.653 + 469.98 + 472.243 + 469.769 = $1,888 Mil.
Gross Profit was 265.289 + 262.16 + 273.508 + 275.711 = $1,077 Mil.
Total Current Assets was $1,386 Mil.
Total Assets was $6,012 Mil.
Property, Plant and Equipment(Net PPE) was $144 Mil.
Depreciation, Depletion and Amortization(DDA) was $216 Mil.
Selling, General & Admin. Expense(SGA) was $612 Mil.
Total Current Liabilities was $832 Mil.
Long-Term Debt was $2,118 Mil.
Net Income was -39.227 + -55.413 + -32.32 + -34.974 = $-162 Mil.
Non Operating Income was -0.274 + -3.096 + -1.144 + -0.445 = $-5 Mil.
Cash Flow from Operations was 87.026 + 78.156 + 93.495 + 85.481 = $344 Mil.
Accounts Receivable was $373 Mil.
Revenue was 450.999 + 462.268 + 468.781 + 431.744 = $1,814 Mil.
Gross Profit was 259.814 + 279.696 + 297.296 + 273.844 = $1,111 Mil.
Total Current Assets was $1,569 Mil.
Total Assets was $6,091 Mil.
Property, Plant and Equipment(Net PPE) was $133 Mil.
Depreciation, Depletion and Amortization(DDA) was $199 Mil.
Selling, General & Admin. Expense(SGA) was $578 Mil.
Total Current Liabilities was $568 Mil.
Long-Term Debt was $2,337 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)
=(387.715 / 1887.645) / (372.571 / 1813.792)
=0.20539614 / 0.20540999
=0.9999

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)
=(262.16 / 1813.792) / (265.289 / 1887.645)
=0.61233592 / 0.57037632
=1.0736

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 - (1385.778 + 144.173) / 6011.666) / (1 - (1568.771 + 132.648) / 6090.74)
=0.74550299 / 0.7206548
=1.0345

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
=1887.645 / 1813.792
=1.0407

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))
=(199.469 / (199.469 + 132.648)) / (215.5 / (215.5 + 144.173))
=0.60059858 / 0.59915534
=1.0024

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)
=(611.925 / 1887.645) / (578.437 / 1813.792)
=0.32417377 / 0.31891033
=1.0165

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)
=((2117.522 + 832.34) / 6011.666) / ((2336.75 + 568.479) / 6090.74)
=0.4906896 / 0.47699114
=1.0287

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
=(-161.934 - -4.959 - 344.158) / 6011.666
=-0.0834

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 -2.79 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

Dec03Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
DSRI 1.94490.95551.12271.03690.72060.87490.91561.05911.08440.8933
GMI 1.15991.03871.021.02581.05431.02390.98031.02120.97991.0799
AQI 1.06911.0041.01581.0351.01770.94351.00391.01560.88921.0769
SGI 1.26991.71631.67181.54951.44261.09431.17741.17861.25231.1234
DEPI 1.19821.2281.0050.97580.83740.95190.99731.04481.11171.0414
SGAI 1.17460.98830.99240.91490.89710.86261.03620.99220.93650.9977
LVGI 0.76351.71562.11651.16980.84210.80830.9030.99111.4361.0499
TATA -0.0291-0.0282-0.0564-0.0554-0.0792-0.0815-0.0852-0.0806-0.0497-0.0841
M-score -1.32-2.20-2.38-2.23-2.63-2.82-2.78-2.62-2.58-2.80

Nuance Communications Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.07551.14471.09221.08440.98360.93910.95220.89330.97660.9999
GMI 1.00530.9870.98810.97990.99341.03121.05221.07991.09171.0736
AQI 0.93440.94270.9940.88921.02981.05040.95561.07691.03631.0345
SGI 1.1861.21.22851.25231.27451.25351.19491.12341.06271.0407
DEPI 1.11561.10031.0861.11171.07061.06431.04471.04140.99931.0024
SGAI 0.97110.95110.95360.93650.96390.96050.97641.00250.98781.0165
LVGI 1.21331.24161.24381.4361.19881.17861.21061.04991.02931.0287
TATA -0.0752-0.0744-0.0763-0.0497-0.0564-0.0588-0.0672-0.0841-0.0819-0.0834
M-score -2.67-2.61-2.62-2.58-2.56-2.59-2.71-2.80-2.77-2.79
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