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Nuance Communications Inc (NAS:NUAN)
Beneish M-Score
-3.05 (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 -3.05 suggests that the company is not a manipulator.

NUAN' s Beneish M-Score Range Over the Past 10 Years
Min: -10000000   Max: 10000000
Current: -3.05

-10000000
10000000

During the past 13 years, the highest Beneish M-Score of Nuance Communications Inc was 10000000.00. The lowest was -10000000.00. And the median was -2.60.


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 * 0.9851+0.528 * 0.9969+0.404 * 0.9778+0.892 * 1.0091+0.115 * 1.0795
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9247+4.679 * -0.1119-0.327 * 1.1695
=-3.05

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $363 Mil.
Revenue was 477.851 + 478.733 + 486.115 + 504.119 = $1,947 Mil.
Gross Profit was 269.973 + 273.233 + 280.206 + 291.587 = $1,115 Mil.
Total Current Assets was $1,045 Mil.
Total Assets was $5,477 Mil.
Property, Plant and Equipment(Net PPE) was $187 Mil.
Depreciation, Depletion and Amortization(DDA) was $232 Mil.
Selling, General & Admin. Expense(SGA) was $564 Mil.
Total Current Liabilities was $668 Mil.
Long-Term Debt was $2,443 Mil.
Net Income was -11.821 + -7.046 + -12.065 + -11.027 = $-42 Mil.
Non Operating Income was -0.489 + 0.006 + -6.801 + -0.182 = $-7 Mil.
Cash Flow from Operations was 125.864 + 159.922 + 141.141 + 151.607 = $579 Mil.
Accounts Receivable was $366 Mil.
Revenue was 477.939 + 475.059 + 474.019 + 502.314 = $1,929 Mil.
Gross Profit was 273.539 + 272.083 + 263.634 + 292.251 = $1,102 Mil.
Total Current Assets was $966 Mil.
Total Assets was $5,589 Mil.
Property, Plant and Equipment(Net PPE) was $192 Mil.
Depreciation, Depletion and Amortization(DDA) was $286 Mil.
Selling, General & Admin. Expense(SGA) was $604 Mil.
Total Current Liabilities was $601 Mil.
Long-Term Debt was $2,114 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)
=(363.476 / 1946.818) / (365.661 / 1929.331)
=0.18670261 / 0.18952735
=0.9851

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)
=(1101.507 / 1929.331) / (1114.999 / 1946.818)
=0.57092692 / 0.57272894
=0.9969

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 - (1044.753 + 186.561) / 5477.393) / (1 - (966.221 + 191.814) / 5589.021)
=0.77520072 / 0.79280182
=0.9778

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
=1946.818 / 1929.331
=1.0091

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))
=(285.557 / (285.557 + 191.814)) / (231.846 / (231.846 + 186.561))
=0.59818674 / 0.55411597
=1.0795

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)
=(563.549 / 1946.818) / (603.944 / 1929.331)
=0.28947185 / 0.31303286
=0.9247

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)
=((2443.126 + 668.255) / 5477.393) / ((2113.741 + 600.817) / 5589.021)
=0.56804049 / 0.48569472
=1.1695

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
=(-41.959 - -7.466 - 578.534) / 5477.393
=-0.1119

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 -3.05 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

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
DSRI 1.03690.72060.87490.88541.09521.08440.89331.07930.8679
GMI 1.02581.05431.02390.98031.02120.97991.07991.0460.9838
AQI 1.0351.01770.94351.00391.01560.88921.07261.04161.0166
SGI 1.54951.44261.09431.17741.17861.25231.12341.03671.004
DEPI 0.97580.83740.95190.99731.04481.11171.09321.05170.9696
SGAI 0.91490.89710.86261.03620.99220.93651.00250.97980.9701
LVGI 1.16980.84210.80830.9030.99111.4361.04990.97321.033
TATA -0.0554-0.0792-0.0815-0.0852-0.0806-0.0497-0.0841-0.0868-0.1044
M-score -2.23-2.63-2.82-2.81-2.58-2.58-2.80-2.72-3.10

Nuance Communications Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.99991.02561.07931.01380.99560.90060.86790.8920.91930.9851
GMI 1.07361.07271.0461.02561.01070.98090.98420.97490.98220.9969
AQI 1.03450.99071.04161.02481.04081.08271.01661.01541.05420.9778
SGI 1.04071.02241.03671.03461.02081.0191.0041.00821.01041.0091
DEPI 1.00241.01711.05171.11060.99220.97930.88360.88761.0961.0795
SGAI 1.01651.0010.97980.97690.97020.97840.96750.93080.92860.9247
LVGI 1.02871.0080.97320.95950.98580.98371.0331.04161.1421.1695
TATA -0.0834-0.0877-0.0868-0.0899-0.1112-0.1106-0.1224-0.1237-0.1174-0.1119
M-score -2.79-2.81-2.72-2.80-2.95-3.04-3.19-3.17-3.10-3.05
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