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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 -3.01 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -3.71   Max: -1.13
Current: -2.65

-3.71
-1.13

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -1.13. The lowest was -3.71. 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 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 * 1.0293+0.404 * 0.9902+0.892 * 0.9078+0.115 * 0.9803
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0693+4.679 * -0.0731-0.327 * 1.0829
=-3.01

* 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 2859.58489845 + 3424.65649722 + 3731.51760127 + 3853.57781753 = $13,869 Mil.
Gross Profit was 1597.94995862 + 1915.13683334 + 1894.98738184 + 2187.70125224 = $7,596 Mil.
Total Current Assets was $4,840 Mil.
Total Assets was $23,167 Mil.
Property, Plant and Equipment(Net PPE) was $6,557 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,697 Mil.
Selling, General & Admin. Expense(SGA) was $3,659 Mil.
Total Current Liabilities was $5,442 Mil.
Long-Term Debt was $1,752 Mil.
Net Income was 184.535557395 + 477.270146485 + 437.283459515 + 891.14490161 = $1,990 Mil.
Non Operating Income was -62.8382249952 + -36.8295544873 + 40.8704392831 + 49.8211091234 = $-9 Mil.
Cash Flow from Operations was 319.284395492 + 1119.80014384 + 1131.40510715 + 1122.31663685 = $3,693 Mil.
Accounts Receivable was $2,544 Mil.
Revenue was 3704.04301075 + 3858.84107371 + 3806.6254417 + 3907.73124712 = $15,277 Mil.
Gross Profit was 2075.65591398 + 2260.24712399 + 2085.37985866 + 2190.47399908 = $8,612 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 $3,144 Mil.
Selling, General & Admin. Expense(SGA) was $3,770 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)
=(2122.46132298 / 13869.3368145) / (2543.91741935 / 15277.2407733)
=0.15303265 / 0.16651681
=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 / 15277.2407733) / (1597.94995862 / 13869.3368145)
=0.56369845 / 0.54766681
=1.0293

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 - (4840.42146814 + 6556.75813332) / 23167.3776023) / (1 - (6371.58666667 + 7859.93333333) / 29226.1763441)
=0.50805051 / 0.5130557
=0.9902

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
=13869.3368145 / 15277.2407733
=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))
=(3143.79410358 / (3143.79410358 + 7859.93333333)) / (2697.12746294 / (2697.12746294 + 6556.75813332))
=0.28570265 / 0.29145892
=0.9803

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)
=(3659.23096813 / 13869.3368145) / (3769.5169361 / 15277.2407733)
=0.26383604 / 0.24674069
=1.0693

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)
=((1752.3078882 + 5441.61838671) / 23167.3776023) / ((2761.86795699 + 5618.5827957) / 29226.1763441)
=0.31051966 / 0.28674469
=1.0829

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
=(1990.23406501 - -8.97623107597 - 3692.80628333) / 23167.3776023
=-0.0731

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 -3.01 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

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.95211.16691.03321.05120.99791.00621.22781.16981.11140.919
GMI 1.00740.99861.06221.08820.89390.9120.89130.89321.01891.0293
AQI 0.92850.9510.92030.95470.97490.97440.98050.99021.0040.9902
SGI 1.00540.87240.92330.93230.92820.90960.91260.92860.92620.9078
DEPI 0.6240.69370.63820.61651.2291.23561.54231.54341.07630.9803
SGAI 1.2211.15091.16991.14540.89120.95090.91870.98231.0981.0693
LVGI 1.04241.30181.1961.10361.08420.88760.96170.93890.97661.0829
TATA -0.0573-0.0581-0.0961-0.098-0.0878-0.0725-0.0617-0.0591-0.0672-0.0731
M-score -2.91-2.89-3.10-3.03-3.01-2.88-2.61-2.64-2.75-3.01
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