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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.38 (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 -2.75 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -3.71   Max: -0.95
Current: -2.38

-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 -2.60.


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 * 1.0725+0.528 * 1.066+0.404 * 1.0209+0.892 * 0.8682+0.115 * 1.2402
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1976+4.679 * -0.0573-0.327 * 0.9567
=-2.75

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
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 $3,951 Mil.
Total Current Liabilities was $6,633 Mil.
Long-Term Debt was $2,247 Mil.
Net Income was 279.530803098 + 184.541605654 + 477.270146485 + 437.283459515 = $1,379 Mil.
Non Operating Income was 0.141401806087 + -62.8229451837 + -36.8295544873 + 40.8704392831 = $-59 Mil.
Cash Flow from Operations was 745.815792011 + 319.266569046 + 1119.80014384 + 1131.40510715 = $3,316 Mil.
Accounts Receivable was $2,762 Mil.
Revenue was 3853.57781753 + 3704.05591398 + 3858.84107371 + 3806.6254417 = $15,223 Mil.
Gross Profit was 2187.70125224 + 1813.15526882 + 2260.24712399 + 2085.37985866 = $8,346 Mil.
Total Current Assets was $6,941 Mil.
Total Assets was $31,073 Mil.
Property, Plant and Equipment(Net PPE) was $8,473 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,366 Mil.
Selling, General & Admin. Expense(SGA) was $3,800 Mil.
Total Current Liabilities was $6,009 Mil.
Long-Term Debt was $2,784 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)
=(2571.57341646 / 13217.2576016) / (2761.62254025 / 15223.1002469)
=0.1945618 / 0.18141
=1.0725

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)
=(1415.36830712 / 15223.1002469) / (1572.66992319 / 13217.2576016)
=0.54827751 / 0.51433986
=1.066

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 - (6260.15072147 + 9664.74756564) / 32801.0916862) / (1 - (6941.10509839 + 8472.92531306) / 31073.3184258)
=0.51450097 / 0.50394643
=1.0209

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
=13217.2576016 / 15223.1002469
=0.8682

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))
=(2366.11423391 / (2366.11423391 + 8472.92531306)) / (2064.53396522 / (2064.53396522 + 9664.74756564))
=0.21829556 / 0.17601538
=1.2402

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)
=(3951.45800145 / 13217.2576016) / (3800.27996567 / 15223.1002469)
=0.29896202 / 0.24963903
=1.1976

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)
=((2246.54497542 + 6633.16450815) / 32801.0916862) / ((2784.2745975 + 6008.50402504) / 31073.3184258)
=0.27071384 / 0.28296877
=0.9567

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
=(1378.62601475 - -58.6406585818 - 3316.28761204) / 32801.0916862
=-0.0573

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 -2.75 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 1.28631.07831.21310.80871.3531.03191.69971.0310.90630.8955
DEPI 0.89990.95640.95860.94731.06691.30260.74870.88721.01481.1393
SGAI 1.20790.9621.14450.95121.07050.94531.25991.04891.16081.0447
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 -2.78-2.85-3.06-3.30-2.60-3.05-1.53-3.00-3.01-2.74

Telefonica Brasil SA Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 1.16691.03321.05120.99791.00621.22781.16981.11140.9191.0725
GMI 0.99861.06221.08820.89390.94060.91930.9221.05311.02251.066
AQI 0.9510.92030.95470.97490.97440.98050.99021.0040.98891.0209
SGI 0.87240.92330.93230.92820.90960.91260.92860.92620.90780.8682
DEPI 3.0491.70791.70920.28980.28110.69240.67081.30411.19881.2402
SGAI 1.15091.16991.14540.89120.9790.94651.00981.12981.05631.1976
LVGI 1.30181.1961.10361.08420.88760.96170.93890.97661.08440.9567
TATA -0.0581-0.0961-0.098-0.0878-0.0725-0.0616-0.0591-0.0671-0.0732-0.0573
M-score -2.62-2.98-2.90-3.11-2.98-2.70-2.73-2.71-2.99-2.75
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