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Nu Skin Enterprises Inc (NYSE:NUS)
Beneish M-Score
-1.97 (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 -1.97 signals that the company is a manipulator.

NUS' s 10-Year Beneish M-Score Range
Min: -3.24   Max: -1.9
Current: -1.97

-3.24
-1.9

During the past 13 years, the highest Beneish M-Score of Nu Skin Enterprises Inc was -1.90. The lowest was -3.24. And the median was -2.61.


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 * 0.6453+0.528 * 1.0331+0.404 * 1.1585+0.892 * 0.8089+0.115 * 0.7668
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0156+4.679 * 0.1854-0.327 * 0.7382
=-1.97

* 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 $36 Mil.
Revenue was 609.607 + 638.8 + 650.027 + 671.061 = $2,569 Mil.
Gross Profit was 503.102 + 529.525 + 494.017 + 564.417 = $2,091 Mil.
Total Current Assets was $835 Mil.
Total Assets was $1,614 Mil.
Property, Plant and Equipment(Net PPE) was $465 Mil.
Depreciation, Depletion and Amortization(DDA) was $55 Mil.
Selling, General & Admin. Expense(SGA) was $1,739 Mil.
Total Current Liabilities was $418 Mil.
Long-Term Debt was $165 Mil.
Net Income was 46.507 + 68.308 + 19.507 + 54.854 = $189 Mil.
Non Operating Income was -16.127 + 1.073 + -21.119 + -17.508 = $-54 Mil.
Cash Flow from Operations was 94.793 + 33.608 + -24.265 + -160.6 = $-56 Mil.
Accounts Receivable was $69 Mil.
Revenue was 1055.786 + 908.299 + 671.328 + 541.305 = $3,177 Mil.
Gross Profit was 891.114 + 768.483 + 560.055 + 451.26 = $2,671 Mil.
Total Current Assets was $1,118 Mil.
Total Assets was $1,821 Mil.
Property, Plant and Equipment(Net PPE) was $396 Mil.
Depreciation, Depletion and Amortization(DDA) was $35 Mil.
Selling, General & Admin. Expense(SGA) was $2,117 Mil.
Total Current Liabilities was $777 Mil.
Long-Term Debt was $114 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)
=(35.834 / 2569.495) / (68.652 / 3176.718)
=0.01394593 / 0.02161098
=0.6453

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)
=(529.525 / 3176.718) / (503.102 / 2569.495)
=0.84077718 / 0.81380232
=1.0331

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 - (834.667 + 464.783) / 1614.434) / (1 - (1118.334 + 396.042) / 1821.062)
=0.19510491 / 0.16841052
=1.1585

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
=2569.495 / 3176.718
=0.8089

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))
=(34.923 / (34.923 + 396.042)) / (54.924 / (54.924 + 464.783))
=0.08103442 / 0.10568263
=0.7668

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)
=(1738.873 / 2569.495) / (2116.8 / 3176.718)
=0.67673726 / 0.6663481
=1.0156

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)
=((164.567 + 418.329) / 1614.434) / ((113.852 + 776.792) / 1821.062)
=0.36105285 / 0.48907945
=0.7382

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
=(189.176 - -53.681 - -56.464) / 1614.434
=0.1854

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 -1.97 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.00111.23251.16210.65341.27920.98851.08430.95331.25050.6453
GMI 1.00791.00051.0071.0030.99980.99291.00950.97680.99241.0331
AQI 0.9721.07581.0580.9880.93180.85110.83440.8670.61821.1585
SGI 1.03780.94451.03791.07771.06691.15491.13451.22261.48980.8089
DEPI 1.00281.07290.93351.00641.01881.45951.00651.41911.56660.7668
SGAI 0.99961.03620.99140.96670.97440.97660.99910.99050.98791.0156
LVGI 0.89471.09761.09060.91940.89350.9570.89951.19881.1580.7382
TATA -0.0529-0.0302-0.0156-0.0283-0.0579-0.0475-0.0646-0.088-0.09230.1854
M-score -2.67-2.46-2.38-2.83-2.42-2.57-2.61-2.82-2.39-1.97

Nu Skin Enterprises Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.92750.95330.94131.15460.92821.25050.86480.49240.71240.6453
GMI 0.96770.97681.0021.00551.00040.99240.99031.00641.01791.0331
AQI 0.82390.8670.85780.81920.67410.61820.70230.88451.09011.1585
SGI 1.25871.22261.22181.1571.28651.48981.49511.43481.12870.8089
DEPI 1.17851.41911.60981.75441.77991.56661.25011.01510.82320.7668
SGAI 1.00130.99050.99150.98870.98130.98790.99120.99931.00951.0156
LVGI 1.33381.19881.26771.00211.13341.1581.01710.90890.70670.7382
TATA -0.1131-0.088-0.1058-0.0701-0.1567-0.09230.04940.11770.25890.1854
M-score -3.02-2.82-2.90-2.51-3.11-2.39-2.03-2.02-1.30-1.97
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