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Nuance Communications Inc (NAS:NUAN)
Beneish M-Score
-2.80 (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 -2.80 suggests that the company is not a manipulator.

NUAN' s 10-Year Beneish M-Score Range
Min: -5.07   Max: 74.31
Current: -2.8

-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 * 1.0138+0.528 * 1.0256+0.404 * 1.0248+0.892 * 1.0346+0.115 * 1.1106
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9769+4.679 * -0.0899-0.327 * 0.9595
=-2.80

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $416 Mil.
Revenue was 474.019 + 502.314 + 475.504 + 475.653 = $1,927 Mil.
Gross Profit was 263.634 + 292.251 + 259.411 + 265.289 = $1,081 Mil.
Total Current Assets was $1,155 Mil.
Total Assets was $5,786 Mil.
Property, Plant and Equipment(Net PPE) was $191 Mil.
Depreciation, Depletion and Amortization(DDA) was $224 Mil.
Selling, General & Admin. Expense(SGA) was $608 Mil.
Total Current Liabilities was $602 Mil.
Long-Term Debt was $2,133 Mil.
Net Income was -50.495 + -1.456 + -54.247 + -39.227 = $-145 Mil.
Non Operating Income was -0.785 + -0.32 + 0.363 + -0.274 = $-1 Mil.
Cash Flow from Operations was 95.685 + 95.934 + 97.031 + 87.026 = $376 Mil.
Accounts Receivable was $397 Mil.
Revenue was 469.98 + 472.243 + 469.769 + 450.999 = $1,863 Mil.
Gross Profit was 262.16 + 273.508 + 275.711 + 259.814 = $1,071 Mil.
Total Current Assets was $1,361 Mil.
Total Assets was $5,986 Mil.
Property, Plant and Equipment(Net PPE) was $143 Mil.
Depreciation, Depletion and Amortization(DDA) was $213 Mil.
Selling, General & Admin. Expense(SGA) was $601 Mil.
Total Current Liabilities was $836 Mil.
Long-Term Debt was $2,113 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)
=(416.249 / 1927.49) / (396.834 / 1862.991)
=0.21595391 / 0.21300908
=1.0138

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)
=(292.251 / 1862.991) / (263.634 / 1927.49)
=0.5749856 / 0.56061769
=1.0256

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 - (1154.867 + 191.35) / 5786.178) / (1 - (1360.675 + 142.971) / 5985.713)
=0.76733917 / 0.74879417
=1.0248

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
=1927.49 / 1862.991
=1.0346

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))
=(213.339 / (213.339 + 142.971)) / (223.84 / (223.84 + 191.35))
=0.59874547 / 0.53912666
=1.1106

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)
=(607.642 / 1927.49) / (601.173 / 1862.991)
=0.3152504 / 0.32269238
=0.9769

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)
=((2132.507 + 602.267) / 5786.178) / ((2112.759 + 835.869) / 5985.713)
=0.47263911 / 0.49261099
=0.9595

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
=(-145.425 - -1.016 - 375.676) / 5786.178
=-0.0899

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 -2.80 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 0.95551.12271.03690.72060.87490.88541.09521.08440.89331.0793
GMI 1.03871.021.02581.05431.02390.98031.02120.97991.07991.046
AQI 1.0041.01581.0351.01770.94351.00391.01560.88921.07261.0416
SGI 1.71631.67181.54951.44261.09431.17741.17861.25231.12341.0367
DEPI 1.2281.0050.97580.83740.95190.99731.04481.11171.09321.0517
SGAI 0.98830.99240.91490.89710.86261.03620.99220.93651.00250.9798
LVGI 1.71562.11651.16980.84210.80830.9030.99111.4361.04990.9732
TATA -0.0282-0.0564-0.0554-0.0792-0.0815-0.0852-0.0806-0.0497-0.0841-0.0868
M-score -2.20-2.38-2.23-2.63-2.82-2.81-2.58-2.58-2.80-2.72

Nuance Communications Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 1.08440.98360.93910.95220.89330.97660.99991.02561.07931.0138
GMI 0.97990.99341.03121.05221.07991.09171.07361.07271.0461.0256
AQI 0.88921.02981.05040.95561.07261.03631.03450.99071.04161.0248
SGI 1.25231.27451.25351.19491.12341.06271.04071.02241.03671.0346
DEPI 1.11171.07061.06431.04471.09320.99931.00241.01711.05171.1106
SGAI 0.93650.96390.96050.97641.00250.98781.01651.0010.97980.9769
LVGI 1.4361.19881.17861.21061.04991.02931.02871.0080.97320.9595
TATA -0.0497-0.0564-0.0588-0.0672-0.0841-0.0819-0.0834-0.0877-0.0868-0.0899
M-score -2.58-2.56-2.59-2.71-2.80-2.77-2.79-2.81-2.72-2.80
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