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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 -2.42 suggests that the company is not a manipulator.
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 -2.56.
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 * 1.2269||+||0.528 * 0.9924||+||0.404 * 0.6182||+||0.892 * 1.4898||+||0.115 * 1.5666|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 0.9879||+||4.679 * -0.094||-||0.327 * 1.158|
|This Year (Dec13) TTM:||Last Year (Dec12) TTM:|
|Accounts Receivable was $74 Mil.|
Revenue was 1016.085 + 927.612 + 682.927 + 550.094 = $3,177 Mil.
Gross Profit was 851.413 + 787.796 + 571.654 + 460.049 = $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.
Net Income was 125.271 + 110.9 + 74.435 + 54.282 = $365 Mil.
Non Operating Income was 6.399 + 0.504 + -1.187 + 0.112 = $6 Mil.
Cash Flow from Operations was 46.033 + 295.286 + 118.471 + 70.386 = $530 Mil.
|Accounts Receivable was $41 Mil.
Revenue was 550.838 + 526.182 + 593.235 + 462.002 = $2,132 Mil.
Gross Profit was 455.794 + 439.414 + 497.651 + 386.246 = $1,779 Mil.
Total Current Assets was $589 Mil.
Total Assets was $1,125 Mil.
Property, Plant and Equipment(Net PPE) was $230 Mil.
Depreciation, Depletion and Amortization(DDA) was $33 Mil.
Selling, General & Admin. Expense(SGA) was $1,438 Mil.
Total Current Liabilities was $320 Mil.
Long-Term Debt was $155 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(74.397 / 3176.718)||/||(40.701 / 2132.257)|
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.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(787.796 / 2132.257)||/||(851.413 / 3176.718)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1118.334 + 396.042) / 1821.062)||/||(1 - (588.603 + 229.787) / 1124.807)|
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.
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))|
|=||(33.412 / (33.412 + 229.787))||/||(34.923 / (34.923 + 396.042))|
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)|
|=||(2116.8 / 3176.718)||/||(1438.261 / 2132.257)|
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)|
|=||((113.852 + 776.792) / 1821.062)||/||((154.963 + 320.103) / 1124.807)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(364.888 - 5.828||-||530.176)||/||1821.062|
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 -2.42 suggests that the company will not be a manipulator.
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
Nu Skin Enterprises, Inc. Annual Data
Nu Skin Enterprises, Inc. Quarterly Data