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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.37 (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 -2.91 suggests that the company is not a manipulator.

VIV' s Beneish M-Score Range Over the Past 10 Years
Min: -3.71   Max: -0.95
Current: -2.37

-3.71
-0.95

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -0.95. The lowest was -3.71. And the median was -2.59.


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 * 0.9883+0.528 * 1.0841+0.404 * 1.041+0.892 * 0.776+0.115 * 1.0897
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2271+4.679 * -0.0576-0.327 * 0.9328
=-2.91

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
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 $3,686 Mil.
Total Current Liabilities was $5,263 Mil.
Long-Term Debt was $1,750 Mil.
Net Income was 227.035509326 + 279.530803098 + 184.541605654 + 477.270146485 = $1,168 Mil.
Non Operating Income was -56.3586288174 + 0.141401806087 + -62.8229451837 + -36.8295544873 = $-156 Mil.
Cash Flow from Operations was 646.704242673 + 745.815792011 + 319.266569046 + 1119.80014384 = $2,832 Mil.
Accounts Receivable was $2,729 Mil.
Revenue was 4301.42435519 + 3853.57781753 + 3704.05591398 + 3858.84107371 = $15,718 Mil.
Gross Profit was 2450.27588862 + 2187.70125224 + 1813.15526882 + 2260.24712399 = $8,711 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 $2,322 Mil.
Selling, General & Admin. Expense(SGA) was $3,871 Mil.
Total Current Liabilities was $6,002 Mil.
Long-Term Debt was $2,674 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)
=(2092.97781308 / 12196.53627) / (2729.12528337 / 15717.8991604)
=0.17160428 / 0.17363168
=0.9883

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)
=(1572.66992319 / 15717.8991604) / (1331.98350072 / 12196.53627)
=0.55423307 / 0.51122371
=1.0841

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 - (4876.2630662 + 7902.28018036) / 26185.6494671) / (1 - (7028.44090851 + 8327.77792036) / 30218.2142093)
=0.51200205 / 0.49182242
=1.041

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
=12196.53627 / 15717.8991604
=0.776

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))
=(2322.07034839 / (2322.07034839 + 8327.77792036)) / (1976.6334801 / (1976.6334801 + 7902.28018036))
=0.21803788 / 0.20008612
=1.0897

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)
=(3685.96699383 / 12196.53627) / (3871.18730988 / 15717.8991604)
=0.30221424 / 0.24629165
=1.2271

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)
=((1749.76941996 + 5263.30164993) / 26185.6494671) / ((2674.41849523 + 6001.53984345) / 30218.2142093)
=0.26782116 / 0.28711023
=0.9328

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
=(1168.37806456 - -155.869726682 - 2831.58674757) / 26185.6494671
=-0.0576

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 -2.91 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.95451.15780.8591.02610.95840.85231.09280.92851.0221.1495
GMI 0.94140.98991.02941.0031.06850.96510.91010.94481.03450.9741
AQI 1.78341.29051.2140.99881.19681.06392.41510.92850.97541.0035
SGI 1.28661.07831.21310.80871.3531.03191.69971.0310.90630.8955
DEPI 0.89990.95640.95860.94731.06691.30260.74870.88721.01481.1393
SGAI 1.51970.9621.14450.95121.07050.94531.25991.04891.16081.0447
LVGI 1.09640.99871.17221.03650.86810.89340.75981.04241.08290.9778
TATA -0.1541-0.1504-0.1407-0.1425-0.1178-0.1169-0.0609-0.0827-0.0895-0.0655
M-score -2.83-2.85-3.06-3.30-2.60-3.05-1.53-3.00-3.01-2.74

Telefonica Brasil SA Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.03321.05120.99791.00621.22781.12741.06990.88271.02820.9883
GMI 1.06221.08820.89390.94060.91930.89571.02130.99031.0281.0841
AQI 0.92030.95470.97490.97440.98050.99021.0040.98891.02091.041
SGI 0.92330.93230.92820.90960.91260.96350.96210.94510.90570.776
DEPI 1.70791.70920.28980.28110.69240.67081.30411.19881.24021.0897
SGAI 1.16991.14540.89120.9790.94650.9221.02880.9561.08561.2271
LVGI 1.1961.10361.08420.88760.96170.93890.97661.08440.95670.9328
TATA -0.0615-0.0624-0.0498-0.0725-0.0616-0.0623-0.0706-0.0774-0.0602-0.0576
M-score -2.82-2.73-2.94-2.98-2.70-2.75-2.73-3.01-2.77-2.91
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