Telefonica Brasil (Telefonica Brasil) Beneish M-Score

: -2.68 (As of Today)

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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.68 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Telefonica Brasil's Beneish M-Score or its related term are showing as below:

VIV' s Beneish M-Score Range Over the Past 10 Years
Min: -3.42 Med: -2.69 Max: -2.49
Current: -2.68

During the past 13 years, the highest Beneish M-Score of Telefonica Brasil was -2.49. The lowest was -3.42. And the median was -2.69.

Telefonica Brasil Beneish M-Score Historical Data

The historical data trend for Telefonica Brasil's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Telefonica Brasil Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Beneish M-Score

-3.07

-3.42

-2.66

-3.02

-2.68

Telefonica Brasil Quarterly Data
	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Jun23	Sep23	Dec23
Beneish M-Score																-2.90	-3.02	-2.84	-2.78	-2.68

Competitive Comparison

For the Telecom Services subindustry, Telefonica Brasil's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Telefonica Brasil Beneish M-Score Distribution

For the Telecommunication Services industry and Communication Services sector, Telefonica Brasil's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Telefonica Brasil's Beneish M-Score falls into.

Telefonica Brasil Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski 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 for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.9291

0.528 * 0.9842

0.404 * 1.0033

0.892 * 1.1635

0.115 * 1.1631

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.983

4.679 * -0.052635

0.327 * 0.9034

-2.60

This Year (Dec23) TTM:

Last Year (Sep22) TTM:

Total Receivables was $2,451 Mil.
Revenue was 2762.302 + 2654.91 + 2623.3 + 2413.398 = $10,454 Mil.
Gross Profit was 1189.876 + 1145.941 + 1171.813 + 1030.526 = $4,538 Mil.
Total Current Assets was $3,928 Mil.
Total Assets was $24,641 Mil.
Property, Plant and Equipment(Net PPE) was $9,453 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,152 Mil.
Selling, General, & Admin. Expense(SGA) was $2,290 Mil.
Total Current Liabilities was $4,099 Mil.
Long-Term Debt & Capital Lease Obligation was $2,911 Mil.
Net Income was 326.676 + 297.962 + 231.273 + 214.728 = $1,071 Mil.
Non Operating Income was -66.81 + -47.613 + -84.545 + -67.01 = $-266 Mil.
Cash Flow from Operations was 782.613 + 959.631 + 0 + 891.373 = $2,634 Mil.

Total Receivables was $2,267 Mil.
Revenue was 2326.454 + 2343.901 + 2281.091 + 2033.801 = $8,985 Mil.
Gross Profit was 981.923 + 1023.02 + 982.888 + 851.325 = $3,839 Mil.
Total Current Assets was $4,023 Mil.
Total Assets was $23,337 Mil.
Property, Plant and Equipment(Net PPE) was $8,685 Mil.
Depreciation, Depletion and Amortization(DDA) was $2,389 Mil.
Selling, General, & Admin. Expense(SGA) was $2,003 Mil.
Total Current Liabilities was $4,727 Mil.
Long-Term Debt & Capital Lease Obligation was $2,622 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total 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)
	=	(2450.812 / 10453.91)	/	(2267.217 / 8985.247)
	=	0.23444	/	0.252327
	=	0.9291

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)
	=	(3839.156 / 8985.247)	/	(4538.156 / 10453.91)
	=	0.427273	/	0.434111
	=	0.9842

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 Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (3927.704 + 9453.069) / 24641.41)	/	(1 - (4022.876 + 8684.733) / 23337.483)
	=	0.45698	/	0.455485
	=	1.0033

4. SGI = Sales Growth Index

Ratio of Revenue 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
	=	10453.91	/	8985.247
	=	1.1635

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization 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))
	=	(2388.652 / (2388.652 + 8684.733))	/	(2152.437 / (2152.437 + 9453.069))
	=	0.215711	/	0.185467
	=	1.1631

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales 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)
	=	(2290.391 / 10453.91)	/	(2002.755 / 8985.247)
	=	0.219094	/	0.222894
	=	0.983

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 in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((2910.643 + 4098.98) / 24641.41)	/	((2621.712 + 4727.135) / 23337.483)
	=	0.284465	/	0.314895
	=	0.9034

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
	=	(1070.639 - -265.978	-	2633.617)	/	24641.41
	=	-0.052635

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Telefonica Brasil has a M-score of -2.60 suggests that the company is unlikely to be a manipulator.

Telefonica Brasil Beneish M-Score Related Terms

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Telefonica Brasil (Telefonica Brasil) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » Telefonica Brasil SA (NYSE:VIV) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

TSPA:Germany VIVT3:Brazil VIV:Argentina

Address

Avenida Engenheiro Luis Carlos Berrini, 1376, 32nd Floor, Sao Paulo, SP, BRA, 04571-936

Website

https://www.telefonica.com.br

Telefonica Brasil, known as Vivo, is the largest wireless carrier in Brazil with 98 million customers, equal to about 40% market share. The firm is strongest in the postpaid business, where it has 60 million customers, about 42% share of this market. It is the incumbent fixed-line telephone operator in Sao Paulo state and, following the acquisition of GVT, the owner of an extensive fiber network across the country. The firm provides internet access to 6 million households on this network. Following its parent Telefonica's footsteps, Vivo is cross-selling fixed-line and wireless services as a converged offering. The firm also sells pay-tv services to its fixed-line customers.