Verizon Communications Beneish M-Score

Verizon Communications 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 Verizon Communications for today is based on a combination of the following eight different indices:

* 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.

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.

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.

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.

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.

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.

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.

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

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

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.

Verizon Communications has a M-score of -2.50 suggests that the company is unlikely to be a manipulator.

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Verizon Communications Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » Verizon Communications Inc (NYSE:VZ) » Definitions » Beneish M-Score

Comparable Companies

NAS:TMUS NAS:CMCSA NYSE:T NAS:CHTR NAS:LBRDA NYSE:LUMN NAS:LBTYA NAS:DISH NYSE:CABO NAS:FYBR SHSE:600941 TSE:9432 XTER:DTE TSE:9433 TSE:9984 ADX:ETISALAT MEX:AMXA TSE:9434 SAU:7010 NSE:BHARTIARTL

Traded in Other Exchanges

VZA.PFD:USA VZ:Peru VZ:Mexico 0Q1S:UK BAC:Germany BAC:Germany BAC:Germany BAC:Germany VZ:Chile VZ:Switzerland VERZ34:Brazil VERIZ:Belgium VZ:Austria VZ:Argentina

Address

1095 Avenue of the Americas, New York, NY, USA, 10036

Website

https://www.verizon.com

Verizon is now primarily a wireless business (more than 70% of revenue and nearly all operating income). It serves about 91 million postpaid and 4 million prepaid phone customers and connects another 25 million data devices, like tablets, via its nationwide network, making it the largest U.S. wireless carrier. The firm has agreed to acquire Tracfone, a wireless reseller that serves about 20 million prepaid customers in the U.S., from America Movil. Fixed-line telecom operations include local networks (12% of revenue) in the Northeast, which reach about 25 million homes and businesses, and nationwide enterprise services (10%). Verizon Media Group, the online media and advertising firm formed with the acquisitions of AOL and Yahoo, provides the remainder of revenue.

Executives

Brouillette Manon	officer: EVP and Group CEO-VZ Consumer	40 AVENUE SPRINGGROVE MONTREAL Z4 H3C 4M8
Hammock Samantha	officer: EVP & Chief HR Officer	1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Tome Carol B	director	55 GLENLAKE PARKWAY, NE ATLANTA GA 30328
Narasimhan Laxman	director	PEPSICO, INC., 700 ANDERSON HILL ROAD PURCHASE NY 10577
Slater Rodney E	director
Bertolini Mark T	director	AETNA INC. 151 FARMINGTON AVENUE HARTFORD CT 06156
Otis Clarence Jr	director	1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Archambeau Shellye L	director	1095 AVENUE OF THE AMERICAS, 8TH FLOOR NEW YORK NY 10036
Austin Roxanne S	director	200 N SEPULVEDA BLVD PO BOX 956 MS ES/001/A102 EL SEGUNDO CA 90245
Healey Melanie	director	VERIZON COMMUNICATIONS INC. 1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Weaver Gregory G.	director	1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Schulman Daniel H	director	C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Qureshi Rima	officer: EVP & Chief Strategy Officer	2000 PURCHASE STREET PURCHASE NY 10577
Gowrappan Kumara Guru	officer: EVP and Group CEO-VZ Media	1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Dunne Ronan	officer: EVP and Group CEO-VZ Consumer	1095 AVENUE OF THE AMERICAS NEW YORK NY 10036