Switch to:
Nuance Communications Inc (NAS:NUAN)
Beneish M-Score
-2.96 (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 -2.96 suggests that the company is not a manipulator.

NUAN' s Beneish M-Score Range Over the Past 10 Years
Min: -3.9   Max: 48.4
Current: -2.96

-3.9
48.4

During the past 13 years, the highest Beneish M-Score of Nuance Communications Inc was 48.40. The lowest was -3.90. 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 * 1.0091+0.528 * 0.9939+0.404 * 0.9957+0.892 * 1.0092+0.115 * 0.9964
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9276+4.679 * -0.1006-0.327 * 1.1143
=-2.96

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $380 Mil.
Revenue was 506.204 + 477.851 + 478.733 + 486.115 = $1,949 Mil.
Gross Profit was 295.68 + 269.973 + 273.233 + 280.206 = $1,119 Mil.
Total Current Assets was $1,039 Mil.
Total Assets was $5,661 Mil.
Property, Plant and Equipment(Net PPE) was $185 Mil.
Depreciation, Depletion and Amortization(DDA) was $231 Mil.
Selling, General & Admin. Expense(SGA) was $558 Mil.
Total Current Liabilities was $691 Mil.
Long-Term Debt was $2,433 Mil.
Net Income was 18.474 + -11.821 + -7.046 + -12.065 = $-12 Mil.
Non Operating Income was -1.206 + -0.489 + 0.006 + -6.801 = $-8 Mil.
Cash Flow from Operations was 138.868 + 125.864 + 159.922 + 141.141 = $566 Mil.
Accounts Receivable was $373 Mil.
Revenue was 504.119 + 477.939 + 475.059 + 474.019 = $1,931 Mil.
Gross Profit was 292.924 + 273.539 + 272.083 + 263.634 = $1,102 Mil.
Total Current Assets was $987 Mil.
Total Assets was $5,512 Mil.
Property, Plant and Equipment(Net PPE) was $186 Mil.
Depreciation, Depletion and Amortization(DDA) was $231 Mil.
Selling, General & Admin. Expense(SGA) was $597 Mil.
Total Current Liabilities was $626 Mil.
Long-Term Debt was $2,103 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)
=(380.004 / 1948.903) / (373.162 / 1931.136)
=0.19498354 / 0.19323445
=1.0091

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)
=(1102.18 / 1931.136) / (1119.092 / 1948.903)
=0.57074178 / 0.57421637
=0.9939

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 - (1038.59 + 185.169) / 5661.47) / (1 - (986.625 + 186.007) / 5511.909)
=0.7838443 / 0.78725483
=0.9957

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
=1948.903 / 1931.136
=1.0092

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))
=(230.645 / (230.645 + 186.007)) / (231.474 / (231.474 + 185.169))
=0.55356749 / 0.55556916
=0.9964

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)
=(558.493 / 1948.903) / (596.585 / 1931.136)
=0.28656788 / 0.30892956
=0.9276

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)
=((2433.152 + 690.899) / 5661.47) / ((2103.079 + 626.384) / 5511.909)
=0.55180916 / 0.49519377
=1.1143

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
=(-12.458 - -8.49 - 565.795) / 5661.47
=-0.1006

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 -2.96 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 local exchange's currency.

Nuance Communications Inc Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
DSRI 1.03690.72060.87490.88541.09521.08440.89331.07930.86791.0091
GMI 1.02581.05431.02390.98031.02120.97991.07991.04420.98430.994
AQI 1.0351.01770.94351.00391.01560.88921.07261.04161.02640.9957
SGI 1.54951.44261.09431.17741.17861.25231.12341.03671.0041.0092
DEPI 0.97580.83740.95190.99731.04481.11171.09321.05170.96960.9964
SGAI 0.91490.89710.86261.03620.99220.93651.00250.99050.96740.9266
LVGI 1.16980.84210.80830.9030.99111.4361.04990.97321.04071.1143
TATA -0.0554-0.0792-0.0815-0.0852-0.0806-0.0497-0.0841-0.0868-0.1058-0.1006
M-score -2.23-2.63-2.82-2.81-2.58-2.58-2.80-2.72-3.10-2.96

Nuance Communications Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.02561.07931.01380.99560.90060.86790.8920.91930.98511.0091
GMI 1.07271.04421.02391.0090.97930.98470.97540.98270.99730.9939
AQI 0.99071.04161.02481.04081.08271.02641.01541.05420.97780.9957
SGI 1.02241.03671.03461.02081.0191.0041.00821.01041.00911.0092
DEPI 0.52180.47750.50642.05942.10092.13562.13520.99630.98090.9964
SGAI 1.0010.99050.98760.98080.98910.96490.92850.92640.92250.9276
LVGI 1.0080.97320.95950.98580.98371.04071.04161.1421.16951.1143
TATA 0.18730.20010.1987-0.0935-0.0926-0.1058-0.1056-0.1174-0.1119-0.1006
M-score -1.58-1.45-1.53-2.75-2.83-2.97-2.94-3.12-3.06-2.96
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK