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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.85 (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 -2.85 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -3.74   Max: -1.01
Current: -2.85

-3.74
-1.01

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -1.01. The lowest was -3.74. And the median was -2.95.


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 * 1.0328+0.528 * 0.9116+0.404 * 0.9744+0.892 * 0.9093+0.115 * 1.0686
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9589+4.679 * -0.0676-0.327 * 0.8876
=-2.85

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $3,543 Mil.
Revenue was 3856.66368115 + 3795.76697402 + 3938.84826325 + 3770.64831261 = $15,362 Mil.
Gross Profit was 1887.85759069 + 2223.30259849 + 2171.29798903 + 2113.63232682 = $8,396 Mil.
Total Current Assets was $6,634 Mil.
Total Assets was $30,430 Mil.
Property, Plant and Equipment(Net PPE) was $8,184 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,426 Mil.
Selling, General & Admin. Expense(SGA) was $3,963 Mil.
Total Current Liabilities was $5,850 Mil.
Long-Term Debt was $2,876 Mil.
Net Income was 295.911330049 + 516.051969824 + 347.440585009 + 405.95026643 = $1,565 Mil.
Non Operating Income was -54.2727272727 + -28.5414920369 + -1.23400365631 + -0.754884547069 = $-85 Mil.
Cash Flow from Operations was 569.218092253 + 1070.78792959 + 1194.28702011 + 874.156305506 = $3,708 Mil.
Accounts Receivable was $3,773 Mil.
Revenue was 4275.6041979 + 4392.18737673 + 4167.78325123 + 4059.31034483 = $16,895 Mil.
Gross Profit was 2073.47426287 + 1513.86193294 + 2391.23152709 + 2438.91625616 = $8,417 Mil.
Total Current Assets was $7,717 Mil.
Total Assets was $34,300 Mil.
Property, Plant and Equipment(Net PPE) was $8,524 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,756 Mil.
Selling, General & Admin. Expense(SGA) was $4,546 Mil.
Total Current Liabilities was $6,419 Mil.
Long-Term Debt was $4,662 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)
=(3542.87729512 / 15361.927231) / (3772.68865567 / 16894.8851707)
=0.23062714 / 0.2233036
=1.0328

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)
=(2223.30259849 / 16894.8851707) / (1887.85759069 / 15361.927231)
=0.49822676 / 0.5465519
=0.9116

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 - (6634.09717868 + 8183.76399463) / 30430.3000448) / (1 - (7716.89805097 + 8523.87956022) / 34300.1609195)
=0.5130557 / 0.52651016
=0.9744

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
=15361.927231 / 16894.8851707
=0.9093

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))
=(2756.39092658 / (2756.39092658 + 8523.87956022)) / (2426.02555923 / (2426.02555923 + 8183.76399463))
=0.24435504 / 0.22865916
=1.0686

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)
=(3963.44241877 / 15361.927231) / (4545.71578782 / 16894.8851707)
=0.25800424 / 0.2690587
=0.9589

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)
=((2875.65741155 + 5850.06941335) / 30430.3000448) / ((4662.23288356 + 6418.77361319) / 34300.1609195)
=0.28674469 / 0.3230599
=0.8876

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
=(1565.35415131 - -84.803107513 - 3708.44934746) / 30430.3000448
=-0.0676

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 -2.85 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 0.98370.95451.15780.8591.02611.22540.86421.2530.85571.0277
GMI 0.98730.94140.98991.02941.0031.06850.96510.91010.94481.0345
AQI 1.03441.78341.29051.2140.99881.19681.06392.41510.92850.9749
SGI 1.20091.28231.07671.2170.83261.28111.06341.72951.02540.8701
DEPI 0.94540.89990.95640.95860.94731.06691.30260.74870.88721.0148
SGAI 0.88831.20790.9621.14450.95121.07051.09431.08831.04891.0787
LVGI 0.98621.09640.99871.17221.03650.86810.90670.74871.04241.0842
TATA -0.1751-0.1541-0.1504-0.1407-0.1425-0.1178-0.1169-0.0609-0.0827-0.0903
M-score -3.11-2.78-2.86-3.06-3.28-2.42-3.04-1.32-3.07-3.02

Telefonica Brasil SA Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 1.32481.13990.6740.82690.77080.90610.82650.93060.96931.0328
GMI 1.0330.66580.97521.04880.85550.8990.96090.98090.91770.9116
AQI 2.41512.39490.94070.8930.92850.9510.92030.95470.97490.9744
SGI 1.63581.79341.25571.02451.13840.99351.05241.07310.92250.9093
DEPI 0.64730.59790.63550.59890.98741.09810.86680.90520.99641.0686
SGAI 1.19912.06731.12141.18040.97330.97570.97870.97020.94240.9589
LVGI 0.74870.56690.95910.87771.04241.30181.1961.29421.08420.8876
TATA -0.0775-0.0898-0.0559-0.0472-0.0559-0.0579-0.0985-0.0931-0.0863-0.0676
M-score -1.38-1.76-2.90-2.89-2.94-3.00-3.18-3.04-3.05-2.85
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