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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.56 (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 -2.93 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -3.72   Max: -0.95
Current: -2.56

-3.72
-0.95

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -0.95. The lowest was -3.72. And the median was -2.65.


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 * 0.919+0.528 * 1.0479+0.404 * 0.9889+0.892 * 0.9078+0.115 * 1.6193
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1324+4.679 * -0.0721-0.327 * 1.0844
=-2.93

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $2,122 Mil.
Revenue was 2859.57789521 + 3424.65649722 + 3731.51760127 + 3853.57513417 = $13,869 Mil.
Gross Profit was 1415.36830712 + 1915.13683334 + 1894.98738184 + 2012.75715564 = $7,238 Mil.
Total Current Assets was $4,840 Mil.
Total Assets was $23,136 Mil.
Property, Plant and Equipment(Net PPE) was $6,557 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,052 Mil.
Selling, General & Admin. Expense(SGA) was $4,040 Mil.
Total Current Liabilities was $5,442 Mil.
Long-Term Debt was $1,752 Mil.
Net Income was 184.541605654 + 477.270146485 + 437.283459515 + 891.168604651 = $1,990 Mil.
Non Operating Income was -62.8229451837 + -36.8295544873 + 40.8704392831 + 24.3703041145 = $-34 Mil.
Cash Flow from Operations was 319.266569046 + 1119.80014384 + 1131.40510715 + 1122.33586762 = $3,693 Mil.
Accounts Receivable was $2,544 Mil.
Revenue was 3704.05591398 + 3858.84107371 + 3806.6254417 + 3907.73124712 = $15,277 Mil.
Gross Profit was 1813.15526882 + 2260.24712399 + 2098.40989399 + 2182.92682927 = $8,355 Mil.
Total Current Assets was $6,372 Mil.
Total Assets was $29,226 Mil.
Property, Plant and Equipment(Net PPE) was $7,860 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,939 Mil.
Selling, General & Admin. Expense(SGA) was $3,930 Mil.
Total Current Liabilities was $5,619 Mil.
Long-Term Debt was $2,762 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)
=(2122.45018145 / 13869.3271279) / (2543.91741935 / 15277.2536765)
=0.15303195 / 0.16651667
=0.919

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)
=(1915.13683334 / 15277.2536765) / (1415.36830712 / 13869.3271279)
=0.54687441 / 0.52188903
=1.0479

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 - (4840.42337811 + 6556.76545489) / 23135.6952314) / (1 - (6371.58666667 + 7859.93333333) / 29226.1763441)
=0.50737643 / 0.5130557
=0.9889

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
=13869.3271279 / 15277.2536765
=0.9078

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))
=(4939.36142823 / (4939.36142823 + 7859.93333333)) / (2051.53945676 / (2051.53945676 + 6556.76545489))
=0.38590887 / 0.23832096
=1.6193

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)
=(4040.2192726 / 13869.3271279) / (3930.12668846 / 15277.2536765)
=0.29130608 / 0.25725348
=1.1324

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)
=((1752.2808302 + 5441.6031069) / 23135.6952314) / ((2761.86795699 + 5618.5827957) / 29226.1763441)
=0.31094306 / 0.28674469
=1.0844

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
=(1990.26381631 - -34.4117562734 - 3692.80768765) / 23135.6952314
=-0.0721

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 -2.93 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 0.95451.15780.8591.02610.94050.87081.08470.9271.02851.1495
GMI 0.94140.98991.02941.0031.04810.97990.89390.96591.03440.9741
AQI 1.78341.29051.2140.99881.00651.26512.41130.92820.97671.004
SGI 1.28631.07831.21310.80871.35211.02981.7051.03090.9060.8955
DEPI 0.89990.95640.95860.94731.06691.30260.74880.88721.01471.1393
SGAI 1.20790.9621.14450.95121.04791.13241.12171.18450.91481.1242
LVGI 1.09640.99871.17221.03651.0140.77620.74831.0421.08520.9766
TATA -0.1541-0.1504-0.1407-0.1425-0.1194-0.1169-0.0611-0.0782-0.0903-0.0655
M-score -2.78-2.85-3.06-3.30-2.76-2.94-1.51-2.99-2.96-2.75

Telefonica Brasil SA Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.95031.16711.03471.0541.00431.00651.2281.16991.11140.919
GMI 0.96720.99160.98060.96750.94060.93240.95921.00041.0471.0479
AQI 0.92820.9510.92030.95470.97670.97440.98050.99021.0040.9889
SGI 1.00560.87220.9220.92980.92790.90930.91250.92850.92620.9078
DEPI 0.90631.01360.85730.83280.63170.62620.91440.90761.74681.6193
SGAI 1.19121.03721.09820.98270.820.89380.92111.02361.15111.1324
LVGI 1.0421.30181.1961.10361.08530.88760.96170.93890.97661.0844
TATA -0.0818-0.0819-0.0579-0.0556-0.0529-0.0349-0.0585-0.0574-0.0653-0.0721
M-score -3.01-2.95-2.93-2.84-2.87-2.75-2.64-2.65-2.65-2.93
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