Switch to:
Nuance Communications Inc (NAS:NUAN)
Beneish M-Score
-2.81 (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 -2.81 suggests that the company is not a manipulator.

NUAN' s 10-Year Beneish M-Score Range
Min: -3.98   Max: 74.3
Current: -2.81

-3.98
74.3

During the past 13 years, the highest Beneish M-Score of Nuance Communications Inc was 74.30. The lowest was -3.98. 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 * 1.0256+0.528 * 1.0727+0.404 * 0.9907+0.892 * 1.0224+0.115 * 1.0171
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0059+4.679 * -0.0877-0.327 * 1.008
=-2.81

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $398 Mil.
Revenue was 475.504 + 475.653 + 469.98 + 472.243 = $1,893 Mil.
Gross Profit was 259.411 + 265.289 + 262.16 + 273.508 = $1,060 Mil.
Total Current Assets was $1,471 Mil.
Total Assets was $6,072 Mil.
Property, Plant and Equipment(Net PPE) was $155 Mil.
Depreciation, Depletion and Amortization(DDA) was $219 Mil.
Selling, General & Admin. Expense(SGA) was $606 Mil.
Total Current Liabilities was $875 Mil.
Long-Term Debt was $2,122 Mil.
Net Income was -54.247 + -39.227 + -55.413 + -32.32 = $-181 Mil.
Non Operating Income was 0.363 + -0.274 + -3.096 + -1.144 = $-4 Mil.
Cash Flow from Operations was 97.031 + 87.026 + 78.156 + 93.495 = $356 Mil.
Accounts Receivable was $380 Mil.
Revenue was 469.769 + 450.999 + 462.268 + 468.781 = $1,852 Mil.
Gross Profit was 275.711 + 259.814 + 279.696 + 297.296 = $1,113 Mil.
Total Current Assets was $1,425 Mil.
Total Assets was $5,987 Mil.
Property, Plant and Equipment(Net PPE) was $138 Mil.
Depreciation, Depletion and Amortization(DDA) was $203 Mil.
Selling, General & Admin. Expense(SGA) was $589 Mil.
Total Current Liabilities was $589 Mil.
Long-Term Debt was $2,344 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)
=(398.436 / 1893.38) / (379.953 / 1851.817)
=0.21043636 / 0.20517848
=1.0256

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)
=(265.289 / 1851.817) / (259.411 / 1893.38)
=0.60077049 / 0.56003972
=1.0727

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 - (1471.144 + 154.722) / 6071.631) / (1 - (1424.61 + 137.541) / 5986.838)
=0.73221923 / 0.7390691
=0.9907

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
=1893.38 / 1851.817
=1.0224

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))
=(202.774 / (202.774 + 137.541)) / (218.83 / (218.83 + 154.722))
=0.59584209 / 0.58580867
=1.0171

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)
=(605.797 / 1893.38) / (589.036 / 1851.817)
=0.31995532 / 0.31808543
=1.0059

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)
=((2122.408 + 875.271) / 6071.631) / ((2343.567 + 588.779) / 5986.838)
=0.4937189 / 0.48979879
=1.008

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
=(-181.207 - -4.151 - 355.708) / 6071.631
=-0.0877

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 -2.81 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 1.94490.95551.12271.03690.72060.87490.91561.05661.0870.8933
GMI 1.04841.14831.02081.02581.05431.02390.98031.02120.97991.0799
AQI 1.06911.0041.01581.0351.01770.94361.00391.01560.88921.0769
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 1.17420.9920.98910.91490.89710.89790.99540.99220.93650.9977
LVGI 0.76351.71562.11651.16980.84210.83360.87560.99111.4361.0499
TATA -0.0291-0.0282-0.0564-0.0554-0.0792-0.0795-0.0852-0.0806-0.0497-0.0841
M-score -1.38-2.14-2.38-2.23-2.63-2.83-2.77-2.62-2.58-2.80

Nuance Communications Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.15361.09621.0870.98360.93910.95220.89330.97660.99991.0256
GMI 0.9870.98810.97990.99341.03121.05221.07991.09171.07361.0727
AQI 0.94270.9940.88921.02981.05040.95561.07691.03631.03450.9907
SGI 1.21.22851.25231.27451.25351.19491.12341.06271.04071.0224
DEPI 1.10031.0861.11171.07061.06431.04471.04140.99931.00241.0171
SGAI 0.95110.95360.93650.96390.95580.97170.99770.9831.02161.0059
LVGI 1.24161.24381.4361.19881.17861.21061.04991.02931.02871.008
TATA -0.0744-0.0763-0.0497-0.0564-0.0588-0.0672-0.0841-0.0819-0.0834-0.0877
M-score -2.60-2.62-2.58-2.56-2.59-2.71-2.80-2.77-2.79-2.81
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)
Free 7-day Trial
FEEDBACK