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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.28 (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 -2.37 suggests that the company is not a manipulator.

VIV' s Beneish M-Score Range Over the Past 10 Years
Min: -3.86   Max: -1.23
Current: -2.28

-3.86
-1.23

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -1.23. The lowest was -3.86. And the median was -2.32.


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 * 1.2707+0.528 * 1.001+0.404 * 1.0307+0.892 * 0.8296+0.115 * 1.5381
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0698+4.679 * -0.026-0.327 * 0.7887
=-2.37

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $2,237 Mil.
Revenue was 2820.82206598 + 2772.83858998 + 2710.79626973 + 3201.50560787 = $11,506 Mil.
Gross Profit was 1853.16387236 + 1392.19387755 + 1331.98350072 + 1572.66992319 = $6,150 Mil.
Total Current Assets was $4,865 Mil.
Total Assets was $27,378 Mil.
Property, Plant and Equipment(Net PPE) was $8,176 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,499 Mil.
Selling, General & Admin. Expense(SGA) was $3,531 Mil.
Total Current Liabilities was $4,650 Mil.
Long-Term Debt was $2,056 Mil.
Net Income was 1024.47268794 + 279.46531643 + 227.035509326 + 279.530803098 = $1,811 Mil.
Non Operating Income was 0 + 142.014533086 + -56.3586288174 + 0.141401806087 = $86 Mil.
Cash Flow from Operations was 0 + 1043.41630592 + 646.704242673 + 745.797795417 = $2,436 Mil.
Accounts Receivable was $2,122 Mil.
Revenue was 2859.58489845 + 3424.65649722 + 3731.51760127 + 3853.57513417 = $13,869 Mil.
Gross Profit was 1597.94995862 + 1915.13683334 + 1894.98738184 + 2012.75715564 = $7,421 Mil.
Total Current Assets was $4,840 Mil.
Total Assets was $23,167 Mil.
Property, Plant and Equipment(Net PPE) was $6,557 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,052 Mil.
Selling, General & Admin. Expense(SGA) was $3,978 Mil.
Total Current Liabilities was $5,442 Mil.
Long-Term Debt was $1,752 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)
=(2237.47971877 / 11505.9625336) / (2122.46132298 / 13869.3341311)
=0.19446263 / 0.15303268
=1.2707

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)
=(1392.19387755 / 13869.3341311) / (1853.16387236 / 11505.9625336)
=0.53505318 / 0.53450645
=1.001

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 - (4865.33261222 + 8176.39264467) / 27378.3937263) / (1 - (4840.42146814 + 6556.75813332) / 23167.3776023)
=0.523649 / 0.50805051
=1.0307

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
=11505.9625336 / 13869.3341311
=0.8296

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))
=(2051.53945676 / (2051.53945676 + 6556.75813332)) / (1499.21282502 / (1499.21282502 + 8176.39264467))
=0.23832116 / 0.1549477
=1.5381

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)
=(3530.50523555 / 11505.9625336) / (3977.92730087 / 13869.3341311)
=0.30684136 / 0.28681458
=1.0698

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)
=((2055.7598702 + 4649.51325041) / 27378.3937263) / ((1752.3078882 + 5441.61838671) / 23167.3776023)
=0.24491112 / 0.31051966
=0.7887

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
=(1810.50431679 - 85.7973060747 - 2435.91834401) / 27378.3937263
=-0.026

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 -2.37 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.15780.8591.02610.94050.87081.08470.9271.02851.14951.0705
GMI 0.98991.02941.0031.04810.97990.89390.96591.03440.97411.0261
AQI 1.29051.2140.99881.00651.26512.41130.92820.97671.0041.0324
SGI 1.07831.21310.80871.35211.02981.7051.03090.9060.89550.7836
DEPI 0.95640.95860.94731.06691.30260.74880.88721.01471.13931.1254
SGAI 0.9621.14450.95121.04791.13241.12171.18450.91481.12420.986
LVGI 0.99871.17221.03651.0140.77620.74831.0421.08520.97660.8624
TATA -0.1377-0.1479-0.1425-0.1194-0.1169-0.0611-0.0782-0.0903-0.0655-0.0637
M-score -2.80-3.10-3.30-2.76-2.94-1.51-2.99-2.96-2.75-2.82

Telefonica Brasil SA Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.00431.00651.2281.16991.11140.9191.07250.95251.06911.2707
GMI 0.94060.93240.95921.00041.0471.02211.0181.00131.01641.001
AQI 0.97670.97440.98050.99021.0040.99021.02091.0411.03251.0307
SGI 0.92790.90930.91250.92850.92620.90780.86820.80520.78460.8296
DEPI 0.99531.00121.18571.17841.10861.01281.24021.08971.12391.5381
SGAI 0.820.89380.92111.02361.15111.11491.07271.02591.02151.0698
LVGI 1.08530.88760.96170.93890.97661.08290.95670.93280.86240.7887
TATA -0.0529-0.0349-0.0585-0.0574-0.0653-0.072-0.0573-0.0576-0.069-0.026
M-score -2.83-2.71-2.60-2.62-2.73-3.01-2.75-2.92-2.85-2.37
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