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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.75 (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 -2.77 suggests that the company is not a manipulator.

VIV' s Beneish M-Score Range Over the Past 10 Years
Min: -3.71   Max: -1.14
Current: -2.75

-3.71
-1.14

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -1.14. The lowest was -3.71. And the median was -2.47.


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 * 1.1333+0.528 * 1.0413+0.404 * 1.0085+0.892 * 0.8606+0.115 * 0.9391
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9817+4.679 * -0.0708-0.327 * 0.9435
=-2.77

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $2,508 Mil.
Revenue was 3070.06163463 + 2820.82098432 + 2772.83858998 + 2710.79626973 = $11,375 Mil.
Gross Profit was 1521.81690717 + 1372.29691725 + 1392.19387755 + 1331.98350072 = $5,618 Mil.
Total Current Assets was $5,416 Mil.
Total Assets was $29,663 Mil.
Property, Plant and Equipment(Net PPE) was $8,855 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,043 Mil.
Selling, General & Admin. Expense(SGA) was $3,379 Mil.
Total Current Liabilities was $5,536 Mil.
Long-Term Debt was $2,040 Mil.
Net Income was 204.327861191 + 329.429421309 + 279.46531643 + 227.035509326 = $1,040 Mil.
Non Operating Income was -78.6986621487 + 14.5546241211 + 142.014533086 + -56.3586288174 = $22 Mil.
Cash Flow from Operations was 871.847286324 + 555.93996755 + 1043.41630592 + 646.704242673 = $3,118 Mil.
Accounts Receivable was $2,572 Mil.
Revenue was 3201.50560787 + 2859.57789521 + 3424.65649722 + 3731.51760127 = $13,217 Mil.
Gross Profit was 1572.66992319 + 1415.36830712 + 1915.13683334 + 1894.98738184 = $6,798 Mil.
Total Current Assets was $6,260 Mil.
Total Assets was $32,801 Mil.
Property, Plant and Equipment(Net PPE) was $9,665 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,065 Mil.
Selling, General & Admin. Expense(SGA) was $3,999 Mil.
Total Current Liabilities was $6,633 Mil.
Long-Term Debt was $2,247 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)
=(2508.13986096 / 11374.5174787) / (2571.57341646 / 13217.2576016)
=0.22050517 / 0.1945618
=1.1333

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)
=(6798.1624455 / 13217.2576016) / (5618.29120269 / 11374.5174787)
=0.51433986 / 0.49393666
=1.0413

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 - (5416.08985219 + 8854.79143542) / 29662.7799848) / (1 - (6260.15072147 + 9664.74756564) / 32801.0916862)
=0.51889603 / 0.51450097
=1.0085

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
=11374.5174787 / 13217.2576016
=0.8606

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))
=(2064.53396522 / (2064.53396522 + 9664.74756564)) / (2042.50215158 / (2042.50215158 + 8854.79143542))
=0.17601538 / 0.18743206
=0.9391

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)
=(3378.9052912 / 11374.5174787) / (3999.46761441 / 13217.2576016)
=0.29705922 / 0.30259436
=0.9817

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)
=((2039.97867617 + 5536.16229479) / 29662.7799848) / ((2246.54497542 + 6633.16450815) / 32801.0916862)
=0.255409 / 0.27071384
=0.9435

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
=(1040.25810825 - 21.511866241 - 3117.90780246) / 29662.7799848
=-0.0708

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 -2.77 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 1.15780.8591.02610.95840.85231.09280.92851.0221.14951.0705
GMI 0.98991.02941.0031.06850.96510.91010.94481.03450.97411.0261
AQI 1.29051.2140.99881.19681.06392.41510.92850.97541.00351.0324
SGI 1.07831.21310.80871.3531.03191.69971.0310.90630.89550.7836
DEPI 0.95640.95860.94731.06691.30260.74870.88721.01481.13931.1254
SGAI 0.9621.14450.95121.07051.09431.08831.12671.07641.04480.9898
LVGI 0.99871.17221.03650.86810.89340.75981.04241.08290.97780.8624
TATA -0.1377-0.1479-0.1425-0.1178-0.1169-0.0609-0.0828-0.0835-0.061-0.0637
M-score -2.80-3.10-3.30-2.60-3.07-1.50-3.01-2.96-2.72-2.82

Telefonica Brasil SA Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.00621.22781.16981.11140.9191.07250.95251.06911.27071.1333
GMI 1.06440.99190.93690.98050.97891.01181.03061.04891.05921.0413
AQI 0.97440.98050.99021.0040.98891.02091.0411.03251.03211.0085
SGI 0.90960.91260.92860.92620.90780.86820.80520.78460.82960.8606
DEPI 1.00111.18561.17831.10861.01281.24021.08971.12391.20460.9391
SGAI 1.10091.02970.98611.05191.07091.06451.02091.01650.96920.9817
LVGI 0.88760.96170.93890.97661.08440.95670.93280.86240.78760.9435
TATA -0.0771-0.0613-0.063-0.0714-0.0812-0.0632-0.0585-0.07-0.0706-0.0708
M-score -2.87-2.62-2.68-2.77-3.07-2.78-2.91-2.84-2.57-2.77
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