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Nuance Communications Inc (NAS:NUAN)
Beneish M-Score
-3.08 (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 -3.08 suggests that the company is not a manipulator.

NUAN' s Beneish M-Score Range Over the Past 10 Years
Min: -10000000   Max: 10000000
Current: -3.08

-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 -2.59.


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 * 0.892+0.528 * 0.9746+0.404 * 1.0154+0.892 * 1.0082+0.115 * 0.9735
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9333+4.679 * -0.1056-0.327 * 1.0416
=-3.08

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $374 Mil.
Revenue was 486.115 + 504.119 + 477.939 + 475.059 = $1,943 Mil.
Gross Profit was 280.206 + 292.615 + 273.248 + 271.76 = $1,118 Mil.
Total Current Assets was $1,035 Mil.
Total Assets was $5,531 Mil.
Property, Plant and Equipment(Net PPE) was $187 Mil.
Depreciation, Depletion and Amortization(DDA) was $232 Mil.
Selling, General & Admin. Expense(SGA) was $572 Mil.
Total Current Liabilities was $603 Mil.
Long-Term Debt was $2,120 Mil.
Net Income was -12.065 + -11.027 + -39.39 + -14.098 = $-77 Mil.
Non Operating Income was -6.801 + -0.182 + -18.375 + -0.11 = $-25 Mil.
Cash Flow from Operations was 141.141 + 151.607 + 120.339 + 119.946 = $533 Mil.
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.



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)
=(374.333 / 1943.232) / (416.249 / 1927.49)
=0.19263423 / 0.21595391
=0.892

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)
=(292.615 / 1927.49) / (280.206 / 1943.232)
=0.56061769 / 0.57524217
=0.9746

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 - (1034.559 + 186.719) / 5530.628) / (1 - (1154.867 + 191.35) / 5786.178)
=0.77917915 / 0.76733917
=1.0154

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
=1943.232 / 1927.49
=1.0082

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))
=(223.84 / (223.84 + 191.35)) / (231.747 / (231.747 + 186.719))
=0.53912666 / 0.55380126
=0.9735

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)
=(571.766 / 1943.232) / (607.642 / 1927.49)
=0.29423455 / 0.3152504
=0.9333

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)
=((2119.825 + 602.978) / 5530.628) / ((2132.507 + 602.267) / 5786.178)
=0.49231353 / 0.47263911
=1.0416

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
=(-76.58 - -25.468 - 533.033) / 5530.628
=-0.1056

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 -3.08 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 1.12271.03690.72060.87490.88541.09521.08440.89331.07930.8679
GMI 1.021.02581.05431.02390.98031.02120.97991.07991.0460.9838
AQI 1.01581.0351.01770.94351.00391.01560.88921.07261.04161.0166
SGI 1.67181.54951.44261.09431.17741.17861.25231.12341.03671.004
DEPI 1.0050.97580.83740.95190.99731.04481.11171.09321.05170.9696
SGAI 0.99240.91490.89710.86261.03620.99220.93651.00250.97980.9701
LVGI 2.11651.16980.84210.80830.9030.99111.4361.04990.97321.033
TATA -0.0564-0.0554-0.0792-0.0815-0.0852-0.0806-0.0497-0.0841-0.0868-0.1044
M-score -2.38-2.23-2.63-2.82-2.81-2.58-2.58-2.80-2.72-3.10

Nuance Communications Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.89330.97660.99991.02561.07931.01380.99560.90060.86790.892
GMI 1.07991.09171.07361.07271.0461.02561.0110.98150.98380.9746
AQI 1.07261.03631.03450.99071.04161.02481.04081.08271.01661.0154
SGI 1.12341.06271.04071.02241.03671.03461.02081.0191.0041.0082
DEPI 1.09320.99931.00241.01711.05171.11061.09141.07780.96960.9735
SGAI 1.00250.98781.01651.0010.97980.97690.9680.97430.97010.9333
LVGI 1.04991.02931.02871.0080.97320.95950.98580.98371.0331.0416
TATA -0.0841-0.0819-0.0834-0.0877-0.0868-0.0899-0.0935-0.0926-0.1044-0.1056
M-score -2.80-2.77-2.79-2.81-2.72-2.80-2.86-2.95-3.10-3.08
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