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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.52 (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 Brasil SA has a M-score of -2.65 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -3.38   Max: -1.47
Current: -2.52

-3.38
-1.47

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -1.47. The lowest was -3.38. And the median was -2.89.


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 Brasil 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 * 1.4853+0.528 * 1.0548+0.404 * 1.004+0.892 * 0.6931+0.115 * 1.2823
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.216+4.679 * -0.0811-0.327 * 0.9766
=-2.65

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $2,545 Mil.
Revenue was 3424.63000114 + 3731.51760127 + 3853.57781753 + 0 = $11,010 Mil.
Gross Profit was 1752.8642265 + 1894.98738184 + 2187.70125224 + 0 = $5,836 Mil.
Total Current Assets was $5,874 Mil.
Total Assets was $27,656 Mil.
Property, Plant and Equipment(Net PPE) was $7,742 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,250 Mil.
Selling, General & Admin. Expense(SGA) was $3,195 Mil.
Total Current Liabilities was $6,060 Mil.
Long-Term Debt was $2,095 Mil.
Net Income was 477.274310156 + 437.283459515 + 891.14490161 + 0 = $1,806 Mil.
Non Operating Income was 38.1138574511 + 40.8704392831 + 49.8211091234 + 0 = $129 Mil.
Cash Flow from Operations was 1119.83799538 + 1131.40510715 + 1122.31663685 + 546.666666667 = $3,920 Mil.
Accounts Receivable was $2,472 Mil.
Revenue was 3858.84107371 + 3806.6254417 + 3907.73124712 + 4312.24798387 = $15,885 Mil.
Gross Profit was 2260.24712399 + 2085.37985866 + 2190.47399908 + 2344.80846774 = $8,881 Mil.
Total Current Assets was $6,790 Mil.
Total Assets was $29,630 Mil.
Property, Plant and Equipment(Net PPE) was $7,858 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,190 Mil.
Selling, General & Admin. Expense(SGA) was $3,791 Mil.
Total Current Liabilities was $5,866 Mil.
Long-Term Debt was $3,080 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)
=(2545.16105833 / 11009.7254199) / (2472.43289305 / 15885.4457464)
=0.23117389 / 0.15564139
=1.4853

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)
=(1894.98738184 / 15885.4457464) / (1752.8642265 / 11009.7254199)
=0.55905951 / 0.53003619
=1.0548

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 - (5873.56372308 + 7742.10378894) / 27656.3412695) / (1 - (6790.24286323 + 7857.5202386) / 29629.7827013)
=0.5076837 / 0.50564055
=1.004

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
=11009.7254199 / 15885.4457464
=0.6931

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))
=(3189.76520078 / (3189.76520078 + 7857.5202386)) / (2249.84281278 / (2249.84281278 + 7742.10378894))
=0.28873747 / 0.22516562
=1.2823

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)
=(3195.19708258 / 11009.7254199) / (3791.29314578 / 15885.4457464)
=0.29021587 / 0.23866457
=1.216

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)
=((2094.98542715 + 6060.41333888) / 27656.3412695) / ((3080.48572646 + 5866.34000852) / 29629.7827013)
=0.2948835 / 0.30195381
=0.9766

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
=(1805.70267128 - 128.805405858 - 3920.22640605) / 27656.3412695
=-0.0811

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 Brasil SA has a M-score of -2.65 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 Brasil SA Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.95451.15780.8591.02610.95840.85231.09280.92851.0221.1495
GMI 0.94140.98991.02941.0031.06850.96510.91010.94481.03450.9741
AQI 1.78341.29051.2140.99881.19681.06392.41510.92850.97541.0035
SGI 1.28631.07831.21310.80871.3531.03191.69971.0310.90630.8955
DEPI 0.89990.95640.95860.94731.06691.30260.74870.88721.01481.1393
SGAI 1.20790.9621.14450.95121.07051.09431.08831.04891.16081.0447
LVGI 1.09640.99871.17221.03650.86810.90670.74871.04241.08290.9778
TATA -0.1541-0.1504-0.1407-0.1425-0.1178-0.1169-0.0609-0.0827-0.0895-0.0655
M-score -2.78-2.85-3.06-3.30-2.60-3.08-1.49-3.00-3.01-2.74

Telefonica Brasil SA Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.86070.82911.03360.90740.91910.99791.32831.62261.54841.4853
GMI 1.04670.85860.87540.93310.95360.89390.91020.88870.89561.0548
AQI 0.8930.92850.9510.92030.95470.97490.97440.98050.99021.004
SGI 1.03811.15450.98481.05131.06630.92820.6890.69060.70150.6931
DEPI 0.55120.90350.95760.89140.87351.23931.46931.83011.83661.2823
SGAI 1.17590.97530.94610.94910.92510.89120.94520.90770.99561.216
LVGI 0.87771.04241.30181.1961.29421.08420.88760.96170.93890.9766
TATA -0.0473-0.0573-0.0586-0.0966-0.0985-0.0883-0.0832-0.0717-0.0694-0.0811
M-score -2.86-2.89-2.92-3.11-3.10-3.01-2.80-2.46-2.51-2.65
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