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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.65 (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 -2.54 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -4.22   Max: -1.42
Current: -2.65

-4.22
-1.42

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -1.42. The lowest was -4.22. 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 * 1.6707+0.528 * 0.8612+0.404 * 0.9805+0.892 * 0.6988+0.115 * 1.1835
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7507+4.679 * -0.0873-0.327 * 0.9617
=-2.54

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $2,777 Mil.
Revenue was 3872.25719424 + 0 + 3795.76697402 + 3938.84826325 = $11,607 Mil.
Gross Profit was 2169.91906475 + 0 + 2223.30259849 + 2171.29798903 = $6,565 Mil.
Total Current Assets was $6,979 Mil.
Total Assets was $31,241 Mil.
Property, Plant and Equipment(Net PPE) was $8,519 Mil.
Depreciation, Depletion and Amortization(DDA) was $3,549 Mil.
Selling, General & Admin. Expense(SGA) was $2,834 Mil.
Total Current Liabilities was $6,041 Mil.
Long-Term Debt was $2,799 Mil.
Net Income was 297.122302158 + 0 + 516.051969824 + 347.440585009 = $1,161 Mil.
Non Operating Income was -43.8399280576 + 0 + -28.5414920369 + -1.23400365631 = $-74 Mil.
Cash Flow from Operations was 1128.42041367 + 569.189431258 + 1070.78792959 + 1194.28702011 = $3,963 Mil.
Accounts Receivable was $2,378 Mil.
Revenue was 3770.64831261 + 4275.6041979 + 4393.64990138 + 4169.11330049 = $16,609 Mil.
Gross Profit was 2111.72291297 + 2073.47426287 + 1511.7642998 + 2392.66009852 = $8,090 Mil.
Total Current Assets was $7,650 Mil.
Total Assets was $31,349 Mil.
Property, Plant and Equipment(Net PPE) was $7,587 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,050 Mil.
Selling, General & Admin. Expense(SGA) was $5,401 Mil.
Total Current Liabilities was $6,123 Mil.
Long-Term Debt was $3,101 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)
=(2776.52338129 / 11606.8724315) / (2378.15275311 / 16609.0157124)
=0.23921374 / 0.14318445
=1.6707

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)
=(0 / 16609.0157124) / (2169.91906475 / 11606.8724315)
=0.48706207 / 0.56557179
=0.8612

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 - (6978.55710432 + 8518.64253597) / 31240.9802158) / (1 - (7649.68916519 + 7586.63410302) / 31348.6234458)
=0.50394643 / 0.51397154
=0.9805

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
=11606.8724315 / 16609.0157124
=0.6988

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))
=(4049.93692645 / (4049.93692645 + 7586.63410302)) / (3548.80462395 / (3548.80462395 + 8518.64253597))
=0.34803525 / 0.29408081
=1.1835

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)
=(2833.62339441 / 11606.8724315) / (5401.13224366 / 16609.0157124)
=0.24413324 / 0.3251928
=0.7507

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)
=((2799.29766187 + 6040.92401079) / 31240.9802158) / ((3101.42095915 + 6122.91296625) / 31348.6234458)
=0.28296877 / 0.29425005
=0.9617

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
=(1160.61485699 - -73.6154237507 - 3962.68479463) / 31240.9802158
=-0.0873

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 -2.54 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 0.98370.95451.15780.8591.02610.94050.87081.08990.92261.0285
GMI 0.98730.94140.98991.02941.0031.04810.97990.91380.94491.0344
AQI 1.03441.78341.29051.2141.00760.99781.26512.41510.92680.9767
SGI 1.20091.28231.07671.2170.83271.28021.06121.73411.02570.8698
DEPI 0.94540.89990.95640.95860.94731.06691.30260.74870.88731.0147
SGAI 0.88831.20790.9621.14450.94511.05471.13241.07431.23680.9148
LVGI 0.98621.09640.99871.17221.03651.0140.77620.74871.04141.0852
TATA -0.1751-0.1541-0.1504-0.1407-0.156-0.1194-0.1169-0.0609-0.0782-0.0903
M-score -3.11-2.78-2.86-3.06-3.34-2.83-2.91-1.46-3.02-3.00

Telefonica Brasil SA Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.90340.66030.87920.8311.04790.8670.94650.97011.41171.6707
GMI 0.9621.011.07690.88310.93070.92690.94550.88910.85210.8612
AQI 2.39490.94070.8930.92680.9510.92030.95470.97670.97440.9805
SGI 1.79841.25871.0271.13870.99371.05241.07290.92220.68080.6988
DEPI 0.49330.46080.43450.87890.9560.91550.95140.98731.2031.1835
SGAI 1.26871.25181.33741.22331.08031.10461.12890.73290.76440.7507
LVGI 0.56690.95910.87771.04141.30181.1961.29421.08530.88760.9617
TATA -0.091-0.0903-0.0801-0.081-0.082-0.0919-0.0863-0.0869-0.0797-0.0873
M-score -1.70-3.09-3.03-3.05-3.00-3.15-3.04-3.03-2.75-2.54
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