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Telefonica SA (NYSE:TEF)
Beneish M-Score
0.00 (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 signals that the company is a manipulator.

TEF' s 10-Year Beneish M-Score Range
Min: -7.73   Max: -1.14
Current: 0

-7.73
-1.14

During the past 13 years, the highest Beneish M-Score of Telefonica SA was -1.14. The lowest was -7.73. And the median was -3.12.


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 * +0.528 * +0.404 * +0.892 * +0.115 *
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * +4.679 * -0.327 *
=

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $15,894 Mil.
Revenue was 17935.0473613 + 17118.7845304 + 21183.9237057 + 19437.9263302 = $75,676 Mil.
Gross Profit was 12948.579161 + 12174.0331492 + 15193.4604905 + 13703.9563438 = $54,020 Mil.
Total Current Assets was $36,368 Mil.
Total Assets was $158,916 Mil.
Property, Plant and Equipment(Net PPE) was $42,037 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $9,264 Mil.
Total Current Liabilities was $37,916 Mil.
Long-Term Debt was $68,145 Mil.
Net Income was 1638.70094723 + 955.801104972 + 1972.7520436 + 1485.67530696 = $6,053 Mil.
Non Operating Income was -327.469553451 + 1.38121546961 + -486.376021798 + -197.817189632 = $-1,010 Mil.
Cash Flow from Operations was 7553.45060893 + 0 + 19542.2343324 + 0 = $27,096 Mil.
Accounts Receivable was $15,462 Mil.
Revenue was 19691.0994764 + 18675.3585398 + 23376.3297872 + 20394.2931258 = $82,137 Mil.
Gross Profit was 14124.3455497 + 13215.1238592 + 17164.893617 + 14761.3488975 = $59,266 Mil.
Total Current Assets was $30,838 Mil.
Total Assets was $158,618 Mil.
Property, Plant and Equipment(Net PPE) was $42,488 Mil.
Depreciation, Depletion and Amortization(DDA) was $0 Mil.
Selling, General & Admin. Expense(SGA) was $1,288 Mil.
Total Current Liabilities was $38,423 Mil.
Long-Term Debt was $69,836 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)
=(15894.4519621 / 75675.6819276) / (15462.0418848 / 82137.0809292)
=0.21003381 / 0.18824679
=

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)
=(12174.0331492 / 82137.0809292) / (12948.579161 / 75675.6819276)
=0.72154636 / 0.71383604
=

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 - (36368.0649526 + 42036.5358593) / 158916.102842) / (1 - (30837.6963351 + 42488.2198953) / 158617.801047)
=0.50662897 / 0.5377195
=

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
=75675.6819276 / 82137.0809292
=

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))
=(0 / (0 + 42488.2198953)) / (0 / (0 + 42036.5358593))
=0 / 0
=

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)
=(9263.50994106 / 75675.6819276) / (1288.16957107 / 82137.0809292)
=0.12241066 / 0.01568317
=

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)
=((68144.7902571 + 37916.1028417) / 158916.102842) / ((69836.3874346 + 38422.7748691) / 158617.801047)
=0.6674018 / 0.68251584
=

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
=(6052.92940275 - -1010.28154941 - 27095.6849414) / 158916.102842
=-0.1261

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 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.

Telefonica SA Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score

Telefonica SA Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI
GMI
AQI
SGI
DEPI
SGAI
LVGI
TATA
M-score
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