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Telefonica Brasil SA (NYSE:VIV)
Beneish M-Score
-2.71 (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 -2.71 suggests that the company is not a manipulator.

VIV' s 10-Year Beneish M-Score Range
Min: -3.74   Max: -1.22
Current: -2.71

-3.74
-1.22

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil SA was -1.22. The lowest was -3.74. And the median was -2.99.


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 * 1.1943+0.528 * 0.8911+0.404 * 0.9805+0.892 * 0.931+0.115 * 1.1833
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7756+4.679 * -0.0761-0.327 * 0.9617
=-2.71

* 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 $3,617 Mil.
Revenue was 3872.25719424 + 3856.66368115 + 3795.76697402 + 3938.84826325 = $15,464 Mil.
Gross Profit was 2169.91906475 + 1887.85759069 + 2223.30259849 + 2171.29798903 = $8,452 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 $3,003 Mil.
Selling, General & Admin. Expense(SGA) was $3,900 Mil.
Total Current Liabilities was $6,041 Mil.
Long-Term Debt was $2,799 Mil.
Net Income was 297.122302158 + 295.911330049 + 516.051969824 + 347.440585009 = $1,457 Mil.
Non Operating Income was -43.8399280576 + -54.2727272727 + -28.5414920369 + -1.23400365631 = $-128 Mil.
Cash Flow from Operations was 1128.42041367 + 569.189431258 + 1070.78792959 + 1194.28702011 = $3,963 Mil.
Accounts Receivable was $3,253 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 $3,383 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)
=(3616.55665468 / 15463.5361127) / (3252.57548845 / 16609.0157124)
=0.23387643 / 0.19583192
=1.1943

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)
=(1887.85759069 / 16609.0157124) / (2169.91906475 / 15463.5361127)
=0.48706207 / 0.54660054
=0.8911

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
=15463.5361127 / 16609.0157124
=0.931

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))
=(3383.07844519 / (3383.07844519 + 7586.63410302)) / (3002.77527957 / (3002.77527957 + 8518.64253597))
=0.30840174 / 0.2606255
=1.1833

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)
=(3900.44829365 / 15463.5361127) / (5401.13224366 / 16609.0157124)
=0.25223521 / 0.3251928
=0.7756

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
=(1456.52618704 - -127.888151023 - 3962.68479463) / 31240.9802158
=-0.0761

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 -2.71 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 0.98370.95451.15780.8591.02610.94051.1291.24970.90990.9666
GMI 0.98730.94140.98991.02941.0031.04810.97990.91380.94491.0344
AQI 1.03441.12342.04871.2141.00760.99781.26512.41510.92680.9767
SGI 1.20091.28231.07671.2170.83271.28021.06121.73411.02570.8698
DEPI 0.94540.95210.9040.95860.94731.06691.30260.74870.88731.0147
SGAI 0.88831.20790.9621.14450.94511.05471.13241.07431.23680.9148
LVGI 0.98621.18040.92761.17221.03651.0140.77620.74871.04141.0852
TATA -0.1751-0.1452-0.1504-0.1407-0.156-0.1194-0.1169-0.0609-0.0782-0.0903
M-score -3.11-3.03-2.53-3.06-3.34-2.83-2.67-1.31-3.03-3.05

Telefonica Brasil SA Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 1.13670.67250.82490.81960.9060.82650.93080.91161.03311.1943
GMI 0.9621.011.07690.88310.93070.92690.94550.88910.88180.8911
AQI 2.39490.94070.8930.92680.9510.92030.95470.97670.97440.9805
SGI 1.79841.25871.0271.13870.99371.05241.07290.92220.9090.931
DEPI 0.48970.45730.71521.00381.09061.04090.9291.15121.23451.1833
SGAI 1.26871.25181.33741.22331.08031.10461.12890.73290.79010.7756
LVGI 0.56690.95910.87771.04141.30181.1961.29421.08530.88760.9617
TATA -0.091-0.0903-0.0801-0.081-0.082-0.0919-0.0863-0.0869-0.0682-0.0761
M-score -1.49-3.08-3.05-3.04-3.11-3.17-3.06-3.07-2.82-2.71
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