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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.87 (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 -2.61 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: -2.87

-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 -2.63.


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 * 1.2855+0.528 * 0.9451+0.404 * 1.0091+0.892 * 0.9798+0.115 * 1.0684
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1587+4.679 * -0.0743-0.327 * 0.9378
=-2.61

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $2,636 Mil.
Revenue was 3287.02969384 + 3070.04732138 + 2820.82098432 + 2772.83858998 = $11,951 Mil.
Gross Profit was 1666.17330628 + 2034.030496 + 1372.29691725 + 1392.19387755 = $6,465 Mil.
Total Current Assets was $5,667 Mil.
Total Assets was $31,264 Mil.
Property, Plant and Equipment(Net PPE) was $9,444 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,176 Mil.
Selling, General & Admin. Expense(SGA) was $3,937 Mil.
Total Current Liabilities was $6,276 Mil.
Long-Term Debt was $1,576 Mil.
Net Income was 292.847042912 + 204.32902962 + 329.429421309 + 279.46531643 = $1,106 Mil.
Non Operating Income was -79.4955735891 + -67.5059881989 + 14.5546241211 + 142.014533086 = $10 Mil.
Cash Flow from Operations was 947.466187139 + 871.847286324 + 555.93996755 + 1043.41630592 = $3,419 Mil.
Accounts Receivable was $2,093 Mil.
Revenue was 2710.79626973 + 3201.50560787 + 2859.57789521 + 3424.65649722 = $12,197 Mil.
Gross Profit was 1331.98350072 + 1572.66992319 + 1415.36830712 + 1915.13683334 = $6,235 Mil.
Total Current Assets was $4,876 Mil.
Total Assets was $26,186 Mil.
Property, Plant and Equipment(Net PPE) was $7,902 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,977 Mil.
Selling, General & Admin. Expense(SGA) was $3,468 Mil.
Total Current Liabilities was $5,263 Mil.
Long-Term Debt was $1,750 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)
=(2636.37341694 / 11950.7365895) / (2092.97781308 / 12196.53627)
=0.22060342 / 0.17160428
=1.2855

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)
=(6235.15856437 / 12196.53627) / (6464.69459708 / 11950.7365895)
=0.51122371 / 0.54094528
=0.9451

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 - (5666.59811878 + 9443.75937538) / 31264.0971966) / (1 - (4876.2630662 + 7902.28018036) / 26185.6494671)
=0.51668659 / 0.51200205
=1.0091

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
=11950.7365895 / 12196.53627
=0.9798

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))
=(1976.6334801 / (1976.6334801 + 7902.28018036)) / (2176.16846206 / (2176.16846206 + 9443.75937538))
=0.20008612 / 0.187279
=1.0684

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)
=(3937.01233379 / 11950.7365895) / (3467.80079938 / 12196.53627)
=0.32943679 / 0.28432669
=1.1587

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)
=((1576.45364564 + 6275.99040944) / 31264.0971966) / ((1749.76941996 + 5263.30164993) / 26185.6494671)
=0.25116491 / 0.26782116
=0.9378

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
=(1106.07081027 - 9.56759541916 - 3418.66974693) / 31264.0971966
=-0.0743

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 -2.61 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 local exchange's 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

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.22781.16980.9191.07250.95251.27071.13331.2855
GMI 0.99190.93690.97891.01181.03061.05920.95430.9451
AQI 0.98050.99020.98891.02091.0411.03211.00851.0091
SGI 0.91260.92860.90780.86820.80520.82960.86060.9798
DEPI 1.18561.17831.01281.24021.08971.20460.93911.0684
SGAI 1.02970.98611.07091.06450.97221.05251.09191.1587
LVGI 0.96170.93891.08440.95670.93280.78760.94350.9378
TATA -0.0613-0.063-0.0812-0.0632-0.0585-0.0706-0.0711-0.0743
M-score -2.62-2.68-3.07-2.78-2.90-2.59-2.84-2.61
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