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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Petroleo Brasileiro SA Petrobras has an F-score of 4 indicating the company's financial situation is typical for a stable company.

PBR' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 4

4
8

During the past 13 years, the highest Piotroski F-Score of Petroleo Brasileiro SA Petrobras was 8. The lowest was 4. And the median was 6.


Definition

How is the Piotroski F-Score calculated?

* 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:
Net Income was 2225 + 2280 + 2760 + 1484 = $8,749 Mil.
Cash Flow from Operations was 6413 + 3981 + 4734 + 6274 = $21,402 Mil.
Revenue was 36910 + 34494 + 35593 + 33955 = $140,952 Mil.
Gross Profit was 8528 + 8229 + 7474 + 7248 = $31,479 Mil.
Total Assets at the begining of this year (Jun13) was $338,068 Mil.
Total Assets was $363,392 Mil.
Long-Term Debt was $129,025 Mil.
Total Current Assets was $65,502 Mil.
Total Current Liabilities was $34,167 Mil.
Net Income was 2996 + 3854 + 3763 + 2735.627 = $13,349 Mil.

Revenue was 35569 + 36345 + 35660 + 36261.916 = $143,836 Mil.
Gross Profit was 9038 + 9448 + 8046 + 8887.469 = $35,419 Mil.
Total Assets at the begining of last year (Jun12) was $310,704 Mil.
Total Assets was $338,068 Mil.
Long-Term Debt was $104,189 Mil.
Total Current Assets was $65,313 Mil.
Total Current Liabilities was $30,765 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Petroleo Brasileiro SA Petrobras's current net income was 8,749. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Petroleo Brasileiro SA Petrobras's current cash flow from operations was 21,402. ==> Positive ==> Score 1.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income/Total Assets at the beginning of this year (Jun13)
=8749/338068
=0.02587941

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=13348.627/310704
=0.04296252

Petroleo Brasileiro SA Petrobras's return on assets of this year was 0.02587941. Petroleo Brasileiro SA Petrobras's return on assets of last year was 0.04296252. ==> Last year is higher ==> Score 0.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA =< ROA.

Petroleo Brasileiro SA Petrobras's current net income was 8,749. Petroleo Brasileiro SA Petrobras's current cash flow from operations was 21,402. ==> 21,402 > 8,749 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year)=Long-Term Debt/Total Assets
=129025/363392
=0.35505735

Gearing (Last Year)=Long-Term Debt/Total Assets
=104189/338068
=0.30818948

Petroleo Brasileiro SA Petrobras's gearing of this year was 0.35505735. Petroleo Brasileiro SA Petrobras's gearing of last year was 0.30818948. ==> Last year is lower than this year ==> Score 0.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year)=Total Current Assets/Total Current Liabilities
=65502/34167
=1.917113

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=65313/30765
=2.12296441

Petroleo Brasileiro SA Petrobras's current ratio of this year was 1.917113. Petroleo Brasileiro SA Petrobras's current ratio of last year was 2.12296441. ==> Last year's current ratio is higher ==> Score 0.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Petroleo Brasileiro SA Petrobras's number of shares in issue this year was 6522.2. Petroleo Brasileiro SA Petrobras's number of shares in issue last year was 6522.2. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year)=Gross Profit/Revenue
=31479/140952
=0.22333135

Gross Margin (Last Year)=Gross Profit/Revenue
=35419.469/143835.916
=0.24624913

Petroleo Brasileiro SA Petrobras's gross margin of this year was 0.22333135. Petroleo Brasileiro SA Petrobras's gross margin of last year was 0.24624913. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue/Total Assets at the beginning of this year (Jun13)
=140952/338068
=0.41693387

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=143835.916/310704
=0.46293551

Petroleo Brasileiro SA Petrobras's asset turnover of this year was 0.41693387. Petroleo Brasileiro SA Petrobras's asset turnover of last year was 0.46293551. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+0+1+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

Petroleo Brasileiro SA Petrobras has an F-score of 4 indicating the company's financial situation is typical for a stable company.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

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

Petroleo Brasileiro SA Petrobras Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 0100100000
Q4 1111111111
Q5 1111101000
Q6 0010011000
Q7 1100110011
Q8 0100010000
Q9 0110100000
F-score 5864765344

Petroleo Brasileiro SA Petrobras Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 0000011000
Q4 1111111111
Q5 0000000000
Q6 0010011010
Q7 1111100111
Q8 0000001000
Q9 0000010000
F-score 4454466454
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