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Nu Skin Enterprises Inc (NYSE:NUS)
Beneish M-Score
-1.31 (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.

Nu Skin Enterprises Inc has a M-score of -1.31 signals that the company is a manipulator.

NUS' s 10-Year Beneish M-Score Range
Min: -3.39   Max: -1.31
Current: -1.31

-3.39
-1.31

During the past 13 years, the highest Beneish M-Score of Nu Skin Enterprises Inc was -1.31. The lowest was -3.39. 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 Nu Skin Enterprises 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 * 0.7124+0.528 * 1.0179+0.404 * 1.0901+0.892 * 1.1287+0.115 * 0.8232
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0095+4.679 * 0.257-0.327 * 0.7067
=-1.31

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $41 Mil.
Revenue was 638.8 + 650.027 + 671.061 + 1055.786 = $3,016 Mil.
Gross Profit was 529.525 + 494.017 + 564.417 + 891.114 = $2,479 Mil.
Total Current Assets was $805 Mil.
Total Assets was $1,573 Mil.
Property, Plant and Equipment(Net PPE) was $440 Mil.
Depreciation, Depletion and Amortization(DDA) was $50 Mil.
Selling, General & Admin. Expense(SGA) was $2,030 Mil.
Total Current Liabilities was $450 Mil.
Long-Term Debt was $96 Mil.
Net Income was 68.308 + 19.507 + 54.854 + 125.271 = $268 Mil.
Non Operating Income was 1.073 + -21.119 + -17.508 + 6.399 = $-31 Mil.
Cash Flow from Operations was 33.608 + -24.265 + -160.6 + 46.033 = $-105 Mil.
Accounts Receivable was $51 Mil.
Revenue was 908.299 + 671.328 + 541.305 + 550.838 = $2,672 Mil.
Gross Profit was 768.483 + 560.055 + 451.26 + 455.794 = $2,236 Mil.
Total Current Assets was $1,013 Mil.
Total Assets was $1,688 Mil.
Property, Plant and Equipment(Net PPE) was $353 Mil.
Depreciation, Depletion and Amortization(DDA) was $32 Mil.
Selling, General & Admin. Expense(SGA) was $1,781 Mil.
Total Current Liabilities was $709 Mil.
Long-Term Debt was $121 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)
=(40.612 / 3015.674) / (50.506 / 2671.77)
=0.01346697 / 0.01890357
=0.7124

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)
=(494.017 / 2671.77) / (529.525 / 3015.674)
=0.83674568 / 0.82206266
=1.0179

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 - (805.422 + 440.352) / 1573.249) / (1 - (1013.357 + 352.709) / 1688.487)
=0.20815205 / 0.19095261
=1.0901

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
=3015.674 / 2671.77
=1.1287

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))
=(32.21 / (32.21 + 352.709)) / (49.83 / (49.83 + 440.352))
=0.08367994 / 0.10165612
=0.8232

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)
=(2029.588 / 3015.674) / (1781.173 / 2671.77)
=0.67301306 / 0.66666405
=1.0095

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)
=((95.783 + 450.174) / 1573.249) / ((120.606 + 708.51) / 1688.487)
=0.34702517 / 0.4910408
=0.7067

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
=(267.94 - -31.155 - -105.224) / 1573.249
=0.257

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.

Nu Skin Enterprises Inc has a M-score of -1.31 signals that the company is likely to 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.

Nu Skin Enterprises Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.92471.00111.23251.16210.65341.27920.98851.08430.95331.2505
GMI 0.98691.00791.00051.0071.0030.99980.99291.00950.97680.9924
AQI 1.02950.9721.07581.0580.9880.93180.85110.83440.8670.6182
SGI 1.15351.03780.94451.03791.07771.06691.15491.13451.22261.4898
DEPI 1.01311.00281.07290.93351.00641.01881.45951.00651.41911.5666
SGAI 1.0210.99961.03620.99140.96670.97440.97660.99910.99050.9879
LVGI 0.98450.89471.09761.09060.91940.89350.9570.89951.19881.158
TATA -0.0805-0.0529-0.0302-0.0156-0.0283-0.0579-0.0475-0.0646-0.088-0.094
M-score -2.78-2.67-2.46-2.38-2.83-2.42-2.57-2.61-2.82-2.40

Nu Skin Enterprises Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 1.09010.92750.95330.94131.15460.92821.25050.86480.49240.7124
GMI 0.96260.96770.97681.0021.00551.00040.99240.99031.00641.0179
AQI 0.79480.82390.8670.85780.81920.67410.61820.70230.88451.0901
SGI 1.2331.25871.22261.22181.1571.28651.48981.49511.43481.1287
DEPI 1.07791.17851.41911.60981.75441.77991.56661.25011.01510.8232
SGAI 0.99961.00130.99050.99150.98870.98130.98790.99120.99931.0095
LVGI 1.2761.33381.19881.26771.00211.13341.1581.01710.90890.7067
TATA -0.0891-0.1131-0.088-0.1058-0.0701-0.1567-0.0940.04750.11590.257
M-score -2.79-3.02-2.82-2.90-2.51-3.11-2.40-2.04-2.03-1.31
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