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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.63 (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 -2.64 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -4.22   Max: -1.14
Current: -2.63

-4.22
-1.14

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -1.14. The lowest was -4.22. And the median was -2.92.


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 * 1.1699+0.528 * 0.9128+0.404 * 0.9902+0.892 * 0.9285+0.115 * 1.132
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8478+4.679 * -0.0574-0.327 * 0.9389
=-2.64

* 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 $2,729 Mil.
Revenue was 3731.51760127 + 3853.57513417 + 3704.05591398 + 3858.84107371 = $15,148 Mil.
Gross Profit was 1894.98738184 + 2012.75715564 + 1813.15526882 + 2260.24712399 = $7,981 Mil.
Total Current Assets was $7,028 Mil.
Total Assets was $30,218 Mil.
Property, Plant and Equipment(Net PPE) was $8,328 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,118 Mil.
Selling, General & Admin. Expense(SGA) was $4,387 Mil.
Total Current Liabilities was $6,002 Mil.
Long-Term Debt was $2,674 Mil.
Net Income was 437.283459515 + 891.168604651 + 284.202150538 + 524.627183639 = $2,137 Mil.
Non Operating Income was 40.8704392831 + 24.3703041145 + -52.1251612903 + -29.0157648061 = $-16 Mil.
Cash Flow from Operations was 1131.40510715 + 1122.33586762 + 546.694193548 + 1088.58116745 = $3,889 Mil.
Accounts Receivable was $2,513 Mil.
Revenue was 3806.6254417 + 3907.73124712 + 4312.23991935 + 4287.93166506 = $16,315 Mil.
Gross Profit was 2098.40989399 + 2182.92682927 + 2089.67237903 + 1475.38883542 = $7,846 Mil.
Total Current Assets was $8,185 Mil.
Total Assets was $31,588 Mil.
Property, Plant and Equipment(Net PPE) was $7,713 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,619 Mil.
Selling, General & Admin. Expense(SGA) was $5,573 Mil.
Total Current Liabilities was $6,501 Mil.
Long-Term Debt was $3,158 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)
=(2729.12528337 / 15147.9897231) / (2512.5 / 16314.5282732)
=0.18016419 / 0.15400384
=1.1699

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)
=(2012.75715564 / 16314.5282732) / (1894.98738184 / 15147.9897231)
=0.48094544 / 0.52687829
=0.9128

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 - (7028.44090851 + 8327.77792036) / 30218.2142093) / (1 - (8185.42402827 + 7713.16254417) / 31588.2067138)
=0.49182242 / 0.49669233
=0.9902

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
=15147.9897231 / 16314.5282732
=0.9285

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))
=(4618.70932625 / (4618.70932625 + 7713.16254417)) / (4117.61444724 / (4117.61444724 + 8327.77792036))
=0.37453433 / 0.33085453
=1.132

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)
=(4386.81180909 / 15147.9897231) / (5573.11022813 / 16314.5282732)
=0.28959696 / 0.34160413
=0.8478

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)
=((2674.41849523 + 6001.53984345) / 30218.2142093) / ((3158.48056537 + 6501.23674912) / 31588.2067138)
=0.28711023 / 0.30580138
=0.9389

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
=(2137.28139834 - -15.9001826989 - 3889.01633576) / 30218.2142093
=-0.0574

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 -2.64 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.98370.95451.15780.8591.02610.94050.87081.08470.9271.0285
GMI 0.98730.94140.98991.02941.0031.04810.97990.89390.96591.0344
AQI 1.03441.12342.04871.2141.00760.99781.26512.41130.92820.9767
SGI 1.22031.28631.07831.21310.80881.3521.02981.7051.03090.906
DEPI 0.94540.95210.9040.95860.94731.06691.30260.74880.88721.0147
SGAI 0.88831.20790.9621.14450.94511.05471.13241.19221.11450.9148
LVGI 0.98621.18040.92761.17221.03651.0140.77620.74831.0421.0852
TATA -0.1751-0.1452-0.1504-0.1407-0.156-0.1194-0.1169-0.0611-0.0782-0.0903
M-score -3.09-3.03-2.53-3.06-3.36-2.76-2.94-1.52-2.98-2.96

Telefonica Brasil SA Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.56570.74680.95031.16711.03471.0541.00431.00651.2281.1699
GMI 0.92130.90681.02071.04771.03591.09510.89120.88240.9080.9128
AQI 0.94070.8930.92820.9510.92030.95470.97670.97440.98050.9902
SGI 1.47681.19661.00560.87220.9220.92980.92790.90930.91250.9285
DEPI 0.56540.77750.62390.69380.69040.66770.99970.99891.13551.132
SGAI 1.18241.11931.231.08981.14641.23780.75010.81150.83830.8478
LVGI 0.95910.87771.0421.30181.1961.29421.08530.88760.96170.9389
TATA -0.0762-0.0789-0.0829-0.083-0.059-0.0578-0.0529-0.0349-0.0585-0.0574
M-score -2.94-3.01-3.02-2.97-2.93-2.91-2.84-2.72-2.62-2.64
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