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GuruFocus has detected 8 Warning Signs with Nu Skin Enterprises Inc $NUS.
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Nu Skin Enterprises Inc (NYSE:NUS)
Beneish M-Score
-2.97 (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 -2.97 suggests that the company is not a manipulator.

NUS' s Beneish M-Score Range Over the Past 10 Years
Min: -3.39   Max: -1.3
Current: -2.97

-3.39
-1.3

During the past 13 years, the highest Beneish M-Score of Nu Skin Enterprises Inc was -1.30. The lowest was -3.39. And the median was -2.63.


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 * 0.8776+0.528 * 0.9644+0.404 * 1.0829+0.892 * 1.0274+0.115 * 0.9782
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9886+4.679 * -0.075-0.327 * 1.1878
=-2.97

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Accounts Receivable was $29 Mil.
Revenue was 499.099 + 531.329 + 604.162 + 600.475 = $2,235 Mil.
Gross Profit was 387.833 + 422.809 + 478.299 + 472.27 = $1,761 Mil.
Total Current Assets was $706 Mil.
Total Assets was $1,494 Mil.
Property, Plant and Equipment(Net PPE) was $451 Mil.
Depreciation, Depletion and Amortization(DDA) was $73 Mil.
Selling, General & Admin. Expense(SGA) was $1,492 Mil.
Total Current Liabilities was $395 Mil.
Long-Term Debt was $329 Mil.
Net Income was 27.489 + 38.185 + 56.872 + 44.713 = $167 Mil.
Non Operating Income was -4.567 + 1.353 + -5.695 + -11.06 = $-20 Mil.
Cash Flow from Operations was 21.327 + 89.833 + 49.605 + 138.541 = $299 Mil.
Accounts Receivable was $32 Mil.
Revenue was 471.831 + 572.198 + 571.308 + 560.209 = $2,176 Mil.
Gross Profit was 333.962 + 450.761 + 418.553 + 449.946 = $1,653 Mil.
Total Current Assets was $742 Mil.
Total Assets was $1,511 Mil.
Property, Plant and Equipment(Net PPE) was $454 Mil.
Depreciation, Depletion and Amortization(DDA) was $72 Mil.
Selling, General & Admin. Expense(SGA) was $1,469 Mil.
Total Current Liabilities was $448 Mil.
Long-Term Debt was $168 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)
=(28.838 / 2235.065) / (31.985 / 2175.546)
=0.01290253 / 0.01470206
=0.8776

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)
=(1653.222 / 2175.546) / (1761.211 / 2235.065)
=0.75991131 / 0.78799095
=0.9644

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 - (705.839 + 450.607) / 1494.416) / (1 - (742.158 + 453.648) / 1511.473)
=0.22615523 / 0.20884726
=1.0829

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
=2235.065 / 2175.546
=1.0274

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))
=(71.715 / (71.715 + 453.648)) / (73.077 / (73.077 + 450.607))
=0.13650562 / 0.13954408
=0.9782

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)
=(1491.994 / 2235.065) / (1469.017 / 2175.546)
=0.66753942 / 0.67524061
=0.9886

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)
=((329.001 + 394.917) / 1494.416) / ((168.377 + 448.063) / 1511.473)
=0.48441532 / 0.40784056
=1.1878

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
=(167.259 - -19.969 - 299.306) / 1494.416
=-0.075

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 -2.97 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 local exchange's currency.

Nu Skin Enterprises Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 1.16210.65341.27920.98851.09970.941.25050.64531.13170.8954
GMI 1.0071.0030.99980.99291.01280.97360.99241.03311.04051.0114
AQI 1.0580.9880.93180.85110.83440.8670.61821.15851.1740.9329
SGI 1.03791.07771.06691.15491.11861.241.48980.80890.87450.9825
DEPI 0.93351.00641.01881.45951.00651.41911.56660.76680.77880.9693
SGAI 0.99140.96670.97440.97660.99250.99710.98791.01560.99490.9932
LVGI 1.09060.91940.89350.9570.89951.19881.1580.73821.0841.2709
TATA -0.0034-0.0186-0.0501-0.0475-0.0646-0.0833-0.09230.1854-0.1038-0.0773
M-score -2.32-2.79-2.38-2.57-2.61-2.79-2.39-1.97-2.92-3.07

Nu Skin Enterprises Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 0.64530.83481.45811.15981.13171.02810.77291.02450.89540.8776
GMI 1.03311.04631.0131.03761.04051.0591.081.02661.01140.9644
AQI 1.15851.04060.98070.98011.1741.06480.88630.88910.93291.0829
SGI 0.80890.73850.71590.75750.87450.8910.94210.98430.98251.0274
DEPI 0.76680.78720.78540.78790.77880.81540.87050.93080.96930.9782
SGAI 1.01561.00751.00340.99880.99491.00210.99390.99450.99320.9886
LVGI 0.73820.87360.94921.10791.0841.11291.2841.19911.27091.1878
TATA 0.18540.0252-0.0388-0.0949-0.1038-0.0806-0.0935-0.0582-0.0773-0.075
M-score -1.97-2.69-2.50-3.04-2.92-2.93-3.29-2.85-3.07-2.97
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