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Telefonica Brasil S.A. (NYSE:VIV)
Beneish M-Score
-3.07 (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 S.A. has a M-score of -3.07 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -3.38   Max: -1.31
Current: -3.07

-3.38
-1.31

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil S.A. was -1.31. The lowest was -3.38. And the median was -2.90.


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 S.A. 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 * 0.9693+0.528 * 1.0004+0.404 * 0.9749+0.892 * 0.9225+0.115 * 1.0324
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0314+4.679 * -0.0975-0.327 * 1.0842
=-3.07

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $3,351 Mil.
Revenue was 3795.76571668 + 3938.84826325 + 3770.64831261 + 4275.6121939 = $15,781 Mil.
Gross Profit was 1262.627829 + 2171.29798903 + 2113.63232682 + 2324.88755622 = $7,872 Mil.
Total Current Assets was $6,679 Mil.
Total Assets was $29,145 Mil.
Property, Plant and Equipment(Net PPE) was $7,729 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,365 Mil.
Selling, General & Admin. Expense(SGA) was $4,369 Mil.
Total Current Liabilities was $5,770 Mil.
Long-Term Debt was $3,030 Mil.
Net Income was 516.070829841 + 347.440585009 + 405.95026643 + 404.897551224 = $1,674 Mil.
Non Operating Income was 177.031433361 + -1.23400365631 + -0.754884547069 + -0.199900049975 = $175 Mil.
Cash Flow from Operations was 1157.99664711 + 1194.28702011 + 874.156305506 + 1115.24237881 = $4,342 Mil.
Accounts Receivable was $3,747 Mil.
Revenue was 4392.18737673 + 4167.78325123 + 4059.31034483 + 4487.73488121 = $17,107 Mil.
Gross Profit was 1513.86193294 + 2391.23152709 + 2438.91625616 + 2193.01727862 = $8,537 Mil.
Total Current Assets was $7,993 Mil.
Total Assets was $34,641 Mil.
Property, Plant and Equipment(Net PPE) was $8,681 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,770 Mil.
Selling, General & Admin. Expense(SGA) was $4,592 Mil.
Total Current Liabilities was $6,675 Mil.
Long-Term Debt was $2,972 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)
=(3350.72129086 / 15780.8744864) / (3747.21844181 / 17107.015854)
=0.21232799 / 0.21904571
=0.9693

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)
=(2171.29798903 / 17107.015854) / (1262.627829 / 15780.8744864)
=0.4990366 / 0.49885991
=1.0004

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 - (6679.22590109 + 7729.10603521) / 29145.4631182) / (1 - (7992.69280079 + 8680.5443787) / 34640.5779093)
=0.50564066 / 0.51867901
=0.9749

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
=15780.8744864 / 17107.015854
=0.9225

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))
=(2769.73544034 / (2769.73544034 + 8680.5443787)) / (2365.17602682 / (2365.17602682 + 7729.10603521))
=0.24189238 / 0.23430849
=1.0324

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)
=(4369.13611983 / 15780.8744864) / (4591.91693589 / 17107.015854)
=0.27686274 / 0.26842302
=1.0314

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)
=((3030.10980721 + 5770.42917016) / 29145.4631182) / ((2972.46104536 + 6674.94674556) / 34640.5779093)
=0.30195228 / 0.2785002
=1.0842

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
=(1674.3592325 - 174.842645108 - 4341.68235153) / 29145.4631182
=-0.0975

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 S.A. has a M-score of -3.07 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 S.A. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.98370.95451.15780.8591.02611.22540.86421.2530.85571.0277
GMI 0.98730.94140.98991.02941.0031.06850.96510.91010.94481.0345
AQI 1.03441.78341.29051.2140.99881.19681.06392.41510.92850.9749
SGI 1.20091.28231.07671.2170.83261.28111.06341.72951.02540.8701
DEPI 0.94540.89990.95640.95860.94731.06691.30260.74870.88721.0148
SGAI 0.88831.20790.9621.14450.95121.07051.09431.08831.04891.0787
LVGI 0.98621.09640.99871.17221.03650.86810.90670.74871.04241.0842
TATA -0.1751-0.1541-0.1504-0.1407-0.1425-0.1178-0.1169-0.0609-0.0827-0.0903
M-score -3.11-2.78-2.86-3.06-3.28-2.42-3.04-1.32-3.07-3.02

Telefonica Brasil S.A. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 1.25291.32481.13990.6740.82690.77080.90610.82650.93060.9693
GMI 0.89351.0330.66580.97521.04880.85550.87290.9320.95061.0004
AQI 2.44492.41512.39490.94070.8930.92850.9510.92030.95470.9749
SGI 1.65251.63581.79341.25571.02451.13840.99351.05241.07310.9225
DEPI 1.1920.64730.59790.63550.59890.98741.37971.08261.13351.0324
SGAI 1.2331.19912.06731.12141.18040.97330.94340.94620.93851.0314
LVGI 0.73030.74870.56690.95910.87771.04241.30181.1961.29421.0842
TATA -0.0672-0.0775-0.0898-0.0559-0.0472-0.0559-0.059-0.0996-0.0942-0.0975
M-score -1.38-1.38-1.76-2.90-2.89-2.94-2.98-3.17-3.03-3.07
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