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Nu Skin Enterprises Inc (NYSE:NUS)
Beneish M-Score
-2.06 (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 -2.07 signals that the company is a manipulator.

NUS' s 10-Year Beneish M-Score Range
Min: -3.39   Max: -1.64
Current: -2.06

-3.39
-1.64

During the past 13 years, the highest Beneish M-Score of Nu Skin Enterprises Inc was -1.64. The lowest was -3.39. 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 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 * 0.8852+0.528 * 0.9949+0.404 * 0.7027+0.892 * 1.4606+0.115 * 1.2501
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9802+4.679 * 0.0448-0.327 * 1.0318
=-2.07

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $57 Mil.
Revenue was 671.061 + 1016.085 + 927.612 + 682.927 = $3,298 Mil.
Gross Profit was 564.417 + 851.413 + 787.796 + 571.654 = $2,775 Mil.
Total Current Assets was $920 Mil.
Total Assets was $1,642 Mil.
Property, Plant and Equipment(Net PPE) was $412 Mil.
Depreciation, Depletion and Amortization(DDA) was $40 Mil.
Selling, General & Admin. Expense(SGA) was $2,203 Mil.
Total Current Liabilities was $589 Mil.
Long-Term Debt was $110 Mil.
Net Income was 64.261 + 125.271 + 110.9 + 74.435 = $375 Mil.
Non Operating Income was -3.604 + 6.399 + 0.504 + -1.187 = $2 Mil.
Cash Flow from Operations was -160.6 + 46.033 + 295.286 + 118.471 = $299 Mil.
Accounts Receivable was $44 Mil.
Revenue was 550.094 + 588.245 + 526.182 + 593.235 = $2,258 Mil.
Gross Profit was 460.049 + 493.201 + 439.414 + 497.651 = $1,890 Mil.
Total Current Assets was $619 Mil.
Total Assets was $1,208 Mil.
Property, Plant and Equipment(Net PPE) was $264 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $1,538 Mil.
Total Current Liabilities was $359 Mil.
Long-Term Debt was $139 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)
=(56.644 / 3297.685) / (43.809 / 2257.756)
=0.0171769 / 0.01940378
=0.8852

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)
=(851.413 / 2257.756) / (564.417 / 3297.685)
=0.83725389 / 0.84158432
=0.9949

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 - (920.118 + 411.929) / 1641.621) / (1 - (619.303 + 264.363) / 1207.793)
=0.18857824 / 0.26836304
=0.7027

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
=3297.685 / 2257.756
=1.4606

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))
=(32.52 / (32.52 + 264.363)) / (39.562 / (39.562 + 411.929))
=0.1095381 / 0.08762522
=1.2501

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)
=(2202.63 / 3297.685) / (1538.475 / 2257.756)
=0.6679322 / 0.68141774
=0.9802

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)
=((109.882 + 588.741) / 1641.621) / ((138.782 + 359.369) / 1207.793)
=0.425569 / 0.41244733
=1.0318

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
=(374.867 - 2.112 - 299.19) / 1641.621
=0.0448

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 -2.07 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 0.92471.00111.23251.16210.65341.27920.98851.16680.96161.2484
GMI 0.98691.00791.00051.0071.0030.99980.99291.00950.97350.9958
AQI 0.94580.9721.07581.0580.9880.93180.85110.83440.89360.5998
SGI 1.15351.03780.94451.03791.07771.06691.15491.13451.24411.4642
DEPI 1.01311.00281.07290.93351.00641.01881.45951.00651.41911.5666
SGAI 1.0210.99961.03620.99140.96670.97440.97660.99910.99880.9797
LVGI 1.03390.89471.09761.09060.91940.89350.9570.89951.16961.1869
TATA -0.0805-0.0529-0.0302-0.0034-0.0296-0.0579-0.0475-0.0646-0.0813-0.094
M-score -2.83-2.67-2.46-2.32-2.84-2.42-2.57-2.54-2.74-2.43

Nu Skin Enterprises Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.16681.07821.09010.92750.96160.92211.12620.90221.24840.8852
GMI 1.00950.96170.96260.96770.97350.99791.00050.9950.99580.9949
AQI 0.83440.87240.79480.82390.89360.85780.81920.67410.59980.7027
SGI 1.13451.15371.2331.25871.24411.24731.18621.32371.46421.4606
DEPI 1.00651.04241.07791.17851.41911.60981.75441.77991.56661.2501
SGAI 0.99911.00270.99961.00130.99881.00131.00060.9950.97970.9802
LVGI 0.89950.89081.2761.33381.16961.26771.00211.13341.18691.0318
TATA -0.0646-0.0241-0.0891-0.1131-0.0813-0.1015-0.0664-0.1536-0.0940.0448
M-score -2.54-2.42-2.79-3.02-2.74-2.88-2.50-3.09-2.43-2.07
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