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Telefonica SA (NYSE:TEF)
Beneish M-Score
-2.37 (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.

Telefonica SA has a M-score of -2.34 suggests that the company is not a manipulator.

TEF' s Beneish M-Score Range Over the Past 10 Years
Min: -15.04   Max: -0.68
Current: -2.37

-15.04
-0.68

During the past 13 years, the highest Beneish M-Score of Telefonica SA was -0.68. The lowest was -15.04. And the median was -2.27.


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 Telefonica SA 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 * 1.2574+0.528 * 0.9545+0.404 * 1.1247+0.892 * 0.9169+0.115 * 1.0777
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3379+4.679 * 0.0043-0.327 * 1.0509
=-2.34

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $14,060 Mil.
Revenue was 16850.5617978 + 12208.2405345 + 12344.2265795 + 13590.3479237 = $54,993 Mil.
Gross Profit was 11762.9213483 + 8984.40979955 + 10677.5599129 + 9945.00561167 = $41,370 Mil.
Total Current Assets was $21,520 Mil.
Total Assets was $138,209 Mil.
Property, Plant and Equipment(Net PPE) was $39,019 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,946 Mil.
Selling, General & Admin. Expense(SGA) was $12,233 Mil.
Total Current Liabilities was $35,939 Mil.
Long-Term Debt was $57,576 Mil.
Net Income was 522.471910112 + 864.142538976 + -1995.64270153 + 992.14365881 = $383 Mil.
Non Operating Income was 96.6292134831 + -4.45434298441 + -296.296296296 + -1.12233445567 = $-205 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 0 = $0 Mil.
Accounts Receivable was $12,195 Mil.
Revenue was 13540.9652076 + 12676.4069264 + 16732.4290999 + 17030.9278351 = $59,981 Mil.
Gross Profit was 9912.45791246 + 9366.88311688 + 11700.3699137 + 12087.628866 = $43,067 Mil.
Total Current Assets was $36,914 Mil.
Total Assets was $146,620 Mil.
Property, Plant and Equipment(Net PPE) was $36,444 Mil.
Depreciation, Depletion and Amortization(DDA) was $10,213 Mil.
Selling, General & Admin. Expense(SGA) was $9,972 Mil.
Total Current Liabilities was $40,759 Mil.
Long-Term Debt was $53,646 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)
=(14059.5505618 / 54993.3768355) / (12195.2861953 / 59980.729069)
=0.25565898 / 0.20332007
=1.2574

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)
=(43067.339809 / 59980.729069) / (41369.8966724 / 54993.3768355)
=0.71801961 / 0.75227053
=0.9545

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 - (21520.2247191 + 39019.1011236) / 138208.988764) / (1 - (36913.5802469 + 36444.4444444) / 146619.52862)
=0.56197259 / 0.49967085
=1.1247

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
=54993.3768355 / 59980.729069
=0.9169

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))
=(10212.9624494 / (10212.9624494 + 36444.4444444)) / (9945.60412319 / (9945.60412319 + 39019.1011236))
=0.21889263 / 0.20311782
=1.0777

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)
=(12233.0471667 / 54993.3768355) / (9972.33297466 / 59980.729069)
=0.22244583 / 0.16625895
=1.3379

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)
=((57576.4044944 + 35939.3258427) / 138208.988764) / ((53646.4646465 + 40758.698092) / 146619.52862)
=0.67662553 / 0.6438785
=1.0509

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
=(383.115406373 - -205.243760253 - 0) / 138208.988764
=0.0043

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.

Telefonica SA has a M-score of -2.34 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 own currency.

Telefonica SA Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.88260.8970.97851.16831.02531.01370.71970.98091.28630.9044
GMI 1.05440.98541.00420.98380.971.02330.99771.01491.0020.9255
AQI 1.22110.98550.99120.94051.16161.00680.94190.92441.0970.9156
SGI 1.62391.2280.91471.05281.03530.96990.99330.94950.79680.8009
DEPI 0.86680.98840.98571.04481.06010.92730.96910.96961.16010.936
SGAI 0.84150.95220.95581.01560.57281.04150.77650.9261.30271.4531
LVGI 1.09880.96131.03480.98060.94851.04120.99750.99510.97281.0143
TATA -0.0855-0.0642-0.0865-0.0729-0.0498-0.0871-0.0725-0.078-0.0685-0.0861
M-score -2.33-2.67-2.99-2.64-2.51-2.92-3.07-2.92-2.70-3.31

Telefonica SA Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.02861.10821.25911.17130.86610.95580.97660.95051.24571.2574
GMI 1.01431.01061.00241.00180.99550.99170.98560.92630.93390.9545
AQI 0.93830.94221.01141.0970.94250.98630.95550.91561.01851.1247
SGI 0.94160.92410.91350.8750.8330.79950.77410.7620.80790.9169
DEPI 1.00371.09951.12021.07680.94780.99990.97050.9741.12181.0777
SGAI 1.45070.99741.90290.67830.90111.34981.38051.46241.44511.3379
LVGI 0.99640.97790.9660.97280.98480.96481.03221.01431.02221.0509
TATA 0.04250.04270.04120.03330.04450.04370.04470.02520.01680.0043
M-score -2.40-2.25-2.25-2.16-2.55-2.55-2.60-2.78-2.44-2.34
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