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

Petroleo Brasileiro SA Petrobras has an F-score of 5 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 3823.05794631 + 2222.22021505 + 2119.21779964 + 1320.41575773 = $9,485 Mil.
Cash Flow from Operations was 7156.93268002 + 3880.11354839 + 6186.14982111 + 10080.4140468 = $27,304 Mil.
Revenue was 47297.3353217 + 33619.8554839 + 35255.4736136 + 37801.8734762 = $153,975 Mil.
Gross Profit was 10422.2317853 + 8020.46107527 + 8137.91547406 + 9010.22284957 = $35,591 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(339051.431095 + 324189.40179 + 345421.741935 + 357333.299642 + 352903.032636) / 5 = $343779.78142 Mil.
Total Assets at the begining of this year (Sep13) was $339,051 Mil.
Long-Term Debt was $129,801 Mil.
Total Current Assets was $61,410 Mil.
Total Current Liabilities was $36,159 Mil.
Net Income was 3778.05582291 + 3921.6391129 + 3038.616659 + 1499.55830389 = $12,238 Mil.

Revenue was 36135.6607315 + 36982.8694556 + 36074.9539807 + 34319.7879859 = $143,513 Mil.
Gross Profit was 8187.47256978 + 9613.81602823 + 9166.561896 + 7325.53003534 = $34,293 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(319034.533794 + 323378.387873 + 350460.251008 + 342876.873447 + 339051.431095) / 5 = $334960.295443 Mil.
Total Assets at the begining of last year (Sep12) was $319,035 Mil.
Long-Term Debt was $104,016 Mil.
Total Current Assets was $61,354 Mil.
Total Current Liabilities was $31,278 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 9,485. ==> Positive ==> Score 1.

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 27,304. ==> 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 (Sep13)
=9484.91171874/339051.431095
=0.02797485

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=12237.8698987/319034.533794
=0.03835908

Petroleo Brasileiro SA Petrobras's return on assets of this year was 0.02797485. Petroleo Brasileiro SA Petrobras's return on assets of last year was 0.03835908. ==> 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 9,485. Petroleo Brasileiro SA Petrobras's current cash flow from operations (TTM) was 27,304. ==> 27,304 > 9,485 ==> 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: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=129800.67582/343779.78142
=0.37756925

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=104016.472173/334960.295443
=0.31053374

Petroleo Brasileiro SA Petrobras's gearing of this year was 0.37756925. Petroleo Brasileiro SA Petrobras's gearing of last year was 0.31053374. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=61410.2399589/36158.5183284
=1.69836163

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=61354.1669611/31277.7155477
=1.96159361

Petroleo Brasileiro SA Petrobras's current ratio of this year was 1.69836163. Petroleo Brasileiro SA Petrobras's current ratio of last year was 1.96159361. ==> 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 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

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
=35590.8311842/153974.537895
=0.23114751

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=34293.3805293/143513.272154
=0.23895616

Petroleo Brasileiro SA Petrobras's gross margin of this year was 0.23114751. Petroleo Brasileiro SA Petrobras's gross margin of last year was 0.23895616. ==> Last year's gross margin is higher ==> Score 0.

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 (Sep13)
=153974.537895/339051.431095
=0.45413328

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=143513.272154/319034.533794
=0.44983617

Petroleo Brasileiro SA Petrobras's asset turnover of this year was 0.45413328. Petroleo Brasileiro SA Petrobras's asset turnover of last year was 0.44983617. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

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

Petroleo Brasileiro SA Petrobras has an F-score of 5 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
Question 1 1111111111
Question 2 1111111111
Question 3 0100100001
Question 4 1111111111
Question 5 1111001100
Question 6 0010011000
Question 7 1100100011
Question 8 0100010000
Question 9 0101000000
F-score 5855555445

Petroleo Brasileiro SA Petrobras Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Question 1 1111111111
Question 2 1111111111
Question 3 0000111100
Question 4 1111111111
Question 5 0000000000
Question 6 0100110100
Question 7 1111001111
Question 8 0000000000
Question 9 0100101101
F-score 4644546744
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