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Nuance Communications Inc (NAS:NUAN)
Beneish M-Score
-2.95 (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 -2.95 suggests that the company is not a manipulator.

NUAN' s 10-Year Beneish M-Score Range
Min: -5.07   Max: 10000000
Current: -2.95

-5.07
10000000

During the past 13 years, the highest Beneish M-Score of Nuance Communications Inc was 10000000.00. The lowest was -5.07. 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 * 0.9006+0.528 * 0.9815+0.404 * 1.0827+0.892 * 1.019+0.115 * 1.0778
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9743+4.679 * -0.0926-0.327 * 0.9837
=-2.95

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $366 Mil.
Revenue was 477.939 + 475.059 + 474.019 + 502.314 = $1,929 Mil.
Gross Profit was 273.248 + 271.76 + 263.634 + 292.251 = $1,101 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 $228 Mil.
Selling, General & Admin. Expense(SGA) was $601 Mil.
Total Current Liabilities was $601 Mil.
Long-Term Debt was $2,114 Mil.
Net Income was -39.39 + -14.098 + -50.495 + -1.456 = $-105 Mil.
Non Operating Income was -18.375 + -0.11 + -0.785 + -0.32 = $-20 Mil.
Cash Flow from Operations was 120.339 + 119.946 + 95.685 + 95.934 = $432 Mil.
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.



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)
=(365.661 / 1929.331) / (398.436 / 1893.38)
=0.18952735 / 0.21043636
=0.9006

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)
=(271.76 / 1893.38) / (273.248 / 1929.331)
=0.56003972 / 0.57060867
=0.9815

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 - (966.221 + 191.814) / 5589.021) / (1 - (1471.144 + 154.722) / 6071.631)
=0.79280182 / 0.73221923
=1.0827

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
=1929.331 / 1893.38
=1.019

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))
=(218.83 / (218.83 + 154.722)) / (228.388 / (228.388 + 191.814))
=0.58580867 / 0.54351955
=1.0778

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)
=(601.415 / 1929.331) / (605.797 / 1893.38)
=0.31172204 / 0.31995532
=0.9743

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)
=((2113.741 + 600.817) / 5589.021) / ((2122.408 + 875.271) / 6071.631)
=0.48569472 / 0.4937189
=0.9837

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
=(-105.439 - -19.59 - 431.904) / 5589.021
=-0.0926

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 -2.95 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 0.95551.12271.03690.72060.87490.91561.05661.0870.89331.0793
GMI 1.03871.021.02581.05431.02390.98031.02120.97991.07991.046
AQI 1.0041.01581.0351.01770.94361.00391.01560.88921.07691.0374
SGI 1.71631.67181.54951.44261.09431.17741.17861.25231.12341.0367
DEPI 1.2281.0050.97580.83740.95190.99731.04481.11171.04141.104
SGAI 0.98830.99240.91490.89710.89790.99540.99220.93650.99770.9845
LVGI 1.71562.11651.16980.84210.83360.87560.99111.4361.04990.9732
TATA -0.0282-0.0564-0.0554-0.0792-0.0795-0.0852-0.0806-0.0497-0.0841-0.0868
M-score -2.20-2.38-2.23-2.63-2.83-2.77-2.62-2.58-2.80-2.72

Nuance Communications Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.93910.95220.89330.97660.99991.02561.07931.01380.99560.9006
GMI 1.03121.05221.07991.09171.07361.07271.0461.02561.0110.9815
AQI 1.05040.95561.07691.03631.03450.99071.03741.02481.04081.0827
SGI 1.25351.19491.12341.06271.04071.02241.03671.03461.02081.019
DEPI 1.06431.04471.04140.99931.00241.01711.1041.11061.09141.0778
SGAI 0.95580.97170.99770.9831.02161.00590.98450.98160.9680.9743
LVGI 1.17861.21061.04991.02931.02871.0080.97320.95950.98580.9837
TATA -0.0588-0.0672-0.0841-0.0819-0.0834-0.0877-0.0868-0.0899-0.0935-0.0926
M-score -2.59-2.71-2.80-2.77-2.79-2.81-2.72-2.80-2.86-2.95
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