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Telefonica SA (NYSE:TEF)
Beneish M-Score
-1.76 (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 -1.86 signals that the company is a manipulator.

TEF' s 10-Year Beneish M-Score Range
Min: -15.66   Max: -0.71
Current: -1.76

-15.66
-0.71

During the past 13 years, the highest Beneish M-Score of Telefonica SA was -0.71. The lowest was -15.66. And the median was -2.81.


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 * 1.2809+0.528 * 1.0094+0.404 * 1.0114+0.892 * 0.8979+0.115 * 1.1201
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * -4.2806+4.679 * -0.1037-0.327 * 0.966
=-1.86

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $15,081 Mil.
Revenue was 17030.9278351 + 18008.1521739 + 17142.461964 + 20097.39369 = $72,279 Mil.
Gross Profit was 12087.628866 + 13001.3586957 + 12190.8713693 + 14065.8436214 = $51,346 Mil.
Total Current Assets was $35,500 Mil.
Total Assets was $155,238 Mil.
Property, Plant and Equipment(Net PPE) was $41,138 Mil.
Depreciation, Depletion and Amortization(DDA) was $11,485 Mil.
Selling, General & Admin. Expense(SGA) was $13,393 Mil.
Total Current Liabilities was $36,081 Mil.
Long-Term Debt was $65,258 Mil.
Net Income was 1219.07216495 + 1645.38043478 + 957.123098202 + 1987.65432099 = $5,809 Mil.
Non Operating Income was -11.5979381443 + -328.804347826 + 1.38312586445 + -256.515775034 = $-596 Mil.
Cash Flow from Operations was 0 + 7584.23913043 + 0 + 14923.1824417 = $22,507 Mil.
Accounts Receivable was $13,112 Mil.
Revenue was 19022.6969292 + 19846.9656992 + 18554.4041451 + 23069.5538058 = $80,494 Mil.
Gross Profit was 13411.2149533 + 14236.1477573 + 13129.5336788 + 16939.6325459 = $57,717 Mil.
Total Current Assets was $39,865 Mil.
Total Assets was $161,806 Mil.
Property, Plant and Equipment(Net PPE) was $40,943 Mil.
Depreciation, Depletion and Amortization(DDA) was $13,249 Mil.
Selling, General & Admin. Expense(SGA) was $-3,484 Mil.
Total Current Liabilities was $41,101 Mil.
Long-Term Debt was $68,242 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)
=(15081.185567 / 72278.935663) / (13112.1495327 / 80493.6205793)
=0.20865257 / 0.16289675
=1.2809

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)
=(13001.3586957 / 80493.6205793) / (12087.628866 / 72278.935663)
=0.71703234 / 0.71038266
=1.0094

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 - (35500 + 41137.8865979) / 155238.402062) / (1 - (39865.1535381 + 40942.5901202) / 161806.408545)
=0.50632134 / 0.50058997
=1.0114

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
=72278.935663 / 80493.6205793
=0.8979

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))
=(13248.5602661 / (13248.5602661 + 40942.5901202)) / (11485.2913403 / (11485.2913403 + 41137.8865979))
=0.2444783 / 0.21825537
=1.1201

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)
=(13392.7428992 / 72278.935663) / (-3484.25639087 / 80493.6205793)
=0.18529248 / -0.04328612
=-4.2806

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)
=((65257.7319588 + 36081.185567) / 155238.402062) / ((68241.6555407 + 41101.4686248) / 161806.408545)
=0.65279542 / 0.6757651
=0.966

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
=(5809.23001892 - -595.53493514 - 22507.4215721) / 155238.402062
=-0.1037

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 -1.86 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 1.08820.86410.88260.8970.97851.16831.02531.01370.71970.9809
GMI 1.05151.01811.05440.98541.00420.98380.971.02330.99771.0149
AQI 1.02110.9611.22110.98550.99120.94051.16161.00680.94190.9244
SGI 1.11811.10981.62391.2280.91471.05281.03530.96990.99330.9495
DEPI 1.11231.00870.86680.98840.98571.04481.06010.92730.96910.9696
SGAI 2.18740.96570.84150.95220.95581.01560.57281.04150.77650.926
LVGI 1.0761.17621.09880.96131.03480.98060.94851.04120.99750.9951
TATA -0.1239-0.1113-0.0855-0.0642-0.0865-0.0729-0.0498-0.0871-0.0725-0.078
M-score -3.05-3.08-2.33-2.67-2.99-2.64-2.51-2.92-3.07-2.92

Telefonica SA Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.87110.95250.76980.99731.17010.95071.0141.21841.1271.2809
GMI 1.01860.99270.99950.9970.99871.00811.02161.02121.01741.0094
AQI 0.99010.96580.94190.98950.96910.91660.92450.93830.94221.0114
SGI 0.92940.95190.92870.91620.94150.94290.91860.92580.90870.8979
DEPI 0.9041.00181.01790.99740.97720.94050.98281.00371.09941.1201
SGAI 0.50940.14530.37010.25370.196-1.14276.19136.072611.2726-4.2806
LVGI 1.00670.9980.99750.97780.98940.97880.99510.99640.97790.966
TATA -0.1715-0.1518-0.139-0.1273-0.1343-0.1334-0.1027-0.1091-0.0983-0.1037
M-score -3.39-3.15-3.32-3.02-2.88-2.86-3.93-3.74-4.67-1.86
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