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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 -2.54 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -4.22   Max: -1.14
Current: -2.56

-4.22
-1.14

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -1.14. The lowest was -4.22. And the median was -2.92.


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 * 1.5484+0.528 * 0.8674+0.404 * 0.9902+0.892 * 0.7015+0.115 * 1.7035
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9824+4.679 * -0.0694-0.327 * 0.9389
=-2.54

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $2,729 Mil.
Revenue was 3731.51760127 + 3853.57781753 + 0 + 3858.84107371 = $11,444 Mil.
Gross Profit was 1894.98738184 + 2187.70125224 + 0 + 2260.24712399 = $6,343 Mil.
Total Current Assets was $7,028 Mil.
Total Assets was $30,218 Mil.
Property, Plant and Equipment(Net PPE) was $8,328 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,347 Mil.
Selling, General & Admin. Expense(SGA) was $3,044 Mil.
Total Current Liabilities was $6,002 Mil.
Long-Term Debt was $2,674 Mil.
Net Income was 437.283459515 + 891.14490161 + 0 + 524.627183639 = $1,853 Mil.
Non Operating Income was 40.8704392831 + 49.8211091234 + 0 + -29.0157648061 = $62 Mil.
Cash Flow from Operations was 1131.40510715 + 1122.31663685 + 546.666666667 + 1088.58116745 = $3,889 Mil.
Accounts Receivable was $2,513 Mil.
Revenue was 3806.6254417 + 3907.73124712 + 4312.23991935 + 4286.50433109 = $16,313 Mil.
Gross Profit was 2085.37985866 + 2188.49516797 + 2091.24092742 + 1477.43599615 = $7,843 Mil.
Total Current Assets was $8,185 Mil.
Total Assets was $31,588 Mil.
Property, Plant and Equipment(Net PPE) was $7,713 Mil.
Depreciation, Depletion and Amortization(DDA) was $4,618 Mil.
Selling, General & Admin. Expense(SGA) was $4,416 Mil.
Total Current Liabilities was $6,501 Mil.
Long-Term Debt was $3,158 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)
=(2729.12528337 / 11443.9364925) / (2512.5 / 16313.1009393)
=0.23847784 / 0.15401731
=1.5484

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)
=(2187.70125224 / 16313.1009393) / (1894.98738184 / 11443.9364925)
=0.48075176 / 0.55426171
=0.8674

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 - (7028.44090851 + 8327.77792036) / 30218.2142093) / (1 - (8185.42402827 + 7713.16254417) / 31588.2067138)
=0.49182242 / 0.49669233
=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
=11443.9364925 / 16313.1009393
=0.7015

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))
=(4618.07317487 / (4618.07317487 + 7713.16254417)) / (2346.7835086 / (2346.7835086 + 8327.77792036))
=0.37450206 / 0.21984824
=1.7035

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)
=(3043.50472366 / 11443.9364925) / (4416.06136584 / 16313.1009393)
=0.26594911 / 0.27070643
=0.9824

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)
=((2674.41849523 + 6001.53984345) / 30218.2142093) / ((3158.48056537 + 6501.23674912) / 31588.2067138)
=0.28711023 / 0.30580138
=0.9389

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
=(1853.05554476 - 61.6757836004 - 3888.96957811) / 30218.2142093
=-0.0694

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 0.98370.95451.15780.8591.02610.95840.85231.09280.92851.022
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 1.22031.28631.07831.21310.80871.3531.03191.69971.0310.9063
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 -3.09-2.78-2.85-3.06-3.30-2.60-3.08-1.49-3.00-3.00

Telefonica Brasil SA Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.64780.86070.82911.03360.90740.91910.99791.32831.62261.5484
GMI 0.97191.04670.85860.90180.96240.98470.92030.88380.86170.8674
AQI 0.94070.8930.92850.9510.92030.95470.97490.97440.98050.9902
SGI 1.28961.03811.15450.98481.05131.06630.92820.6890.69060.7015
DEPI 0.40660.55120.90350.95760.960.94181.44581.82891.69931.7035
SGAI 1.11361.17590.97530.97910.96170.93750.90490.88320.89580.9824
LVGI 0.95910.87771.04241.30181.1961.29421.08420.88760.96170.9389
TATA -0.0569-0.0473-0.0573-0.0571-0.0956-0.0975-0.0872-0.0838-0.0717-0.0694
M-score -2.93-2.86-2.89-2.90-3.08-3.07-2.97-2.77-2.49-2.54
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