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

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

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: 3   Max: 8
Current: 3

3
8

During the past 13 years, the highest Piotroski F-Score of Petroleo Brasileiro SA Petrobras was 8. The lowest was 3. 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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was -1958.27323667 + -10068.5112987 + 1696.69574075 + 170.646270527 = $-10,159 Mil.
Cash Flow from Operations was 11613.5933958 + 5667.89053333 + 5725.47271917 + 7356.10759392 = $30,363 Mil.
Revenue was 45533.1802045 + 32188.9549188 + 23668.7464188 + 25691.1013272 = $127,082 Mil.
Gross Profit was 10527.9751059 + 8333.01790378 + 7133.76201694 + 8214.80219816 = $34,210 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(357333.299642 + 349018.303178 + 300304.704947 + 264833.51372 + 276150.978565) / 5 = $309528.16001 Mil.
Total Assets at the begining of this year (Jun14) was $357,333 Mil.
Long-Term Debt was $119,193 Mil.
Total Current Assets was $51,541 Mil.
Total Current Liabilities was $32,328 Mil.
Net Income was 1499.55830389 + 3175.13634427 + 2319.56989247 + 2217.79964222 = $9,212 Mil.

Revenue was 34319.7879859 + 40871.1678739 + 35073.1182796 + 36805.9033989 = $147,070 Mil.
Gross Profit was 7325.53003534 + 8536.89816787 + 8242.15053763 + 8415.92128801 = $32,521 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(342876.873447 + 339051.431095 + 325236.335322 + 345421.741935 + 357333.299642) / 5 = $341983.936288 Mil.
Total Assets at the begining of last year (Jun13) was $342,877 Mil.
Long-Term Debt was $126,874 Mil.
Total Current Assets was $64,410 Mil.
Total Current Liabilities was $33,597 Mil.

Profitability

Question 1. 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 (TTM) was -10,159. ==> Negative ==> Score 0.

Question 2. 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 (TTM) was 30,363. ==> Positive ==> Score 1.

Question 3. 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 (TTM)/Total Assets at the Beginning of This Year (Jun14)
=-10159.4425241/357333.299642
=-0.02843128

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=9212.06418285/342876.873447
=0.02686697

Petroleo Brasileiro SA Petrobras's return on assets of this year was -0.02843128. Petroleo Brasileiro SA Petrobras's return on assets of last year was 0.02686697. ==> Last year is higher ==> Score 0.

Question 4. 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 (TTM) was -10,159. Petroleo Brasileiro SA Petrobras's current cash flow from operations (TTM) was 30,363. ==> 30,363 > -10,159 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. 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: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=119193.36697/309528.16001
=0.38508085

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=126873.813953/341983.936288
=0.37099349

Petroleo Brasileiro SA Petrobras's gearing of this year was 0.38508085. Petroleo Brasileiro SA Petrobras's gearing of last year was 0.37099349. ==> Last year is lower than this year ==> Score 0.

Question 6. 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: Jun15)=Total Current Assets/Total Current Liabilities
=51540.9583186/32328.3092843
=1.59429798

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=64409.9092129/33597.3461538
=1.917113

Petroleo Brasileiro SA Petrobras's current ratio of this year was 1.59429798. Petroleo Brasileiro SA Petrobras's current ratio of last year was 1.917113. ==> Last year's current ratio is higher ==> Score 0.

Question 7. 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 0. 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

Question 8. 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: TTM)=Gross Profit/Revenue
=34209.5572247/127081.982869
=0.26919282

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=32520.5000289/147069.977538
=0.22112263

Petroleo Brasileiro SA Petrobras's gross margin of this year was 0.26919282. Petroleo Brasileiro SA Petrobras's gross margin of last year was 0.22112263. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year 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 (TTM)/Total Assets at the Beginning of This Year (Jun14)
=127081.982869/357333.299642
=0.35563991

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=147069.977538/342876.873447
=0.42892942

Petroleo Brasileiro SA Petrobras's asset turnover of this year was 0.35563991. Petroleo Brasileiro SA Petrobras's asset turnover of last year was 0.42892942. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+0+1+0+0+1+1+0
=4

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111110
Question 2 1111111111
Question 3 1001000010
Question 4 1111111111
Question 5 1110011000
Question 6 0100110001
Question 7 1001001111
Question 8 1000100001
Question 9 1001000011
F-score 8546555466

Petroleo Brasileiro SA Petrobras Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1111111000
Question 2 1111111111
Question 3 0111100000
Question 4 1111111111
Question 5 0000000010
Question 6 0110100100
Question 7 1111111110
Question 8 0000000111
Question 9 0101001100
F-score 4766645653
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