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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 (Mar15) TTM:Last Year (Mar14) TTM:
Net Income was 2225 + -2150 + -9990.685 + 1862 = $-8,054 Mil.
Cash Flow from Operations was 6413 + 10353 + 5624.08 + 5739 = $28,129 Mil.
Revenue was 36910 + 38844 + 31940.146 + 25967 = $133,661 Mil.
Gross Profit was 8651 + 8774 + 8268.607 + 7827 = $33,521 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(354403 + 363392 + 332818 + 297983.459 + 259335) / 5 = $321586.2918 Mil.
Total Assets at the begining of this year (Mar14) was $354,403 Mil.
Long-Term Debt was $112,456 Mil.
Total Current Assets was $42,881 Mil.
Total Current Liabilities was $28,167 Mil.
Net Income was 2996 + 1504.222 + 2760 + 2280 = $9,540 Mil.

Revenue was 35569 + 34426.535 + 35593 + 34494 = $140,083 Mil.
Gross Profit was 9038 + 7348.315 + 7284 + 8106 = $31,776 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(344415.618 + 338068 + 340106 + 322461 + 354403) / 5 = $339890.7236 Mil.
Total Assets at the begining of last year (Mar13) was $344,416 Mil.
Long-Term Debt was $126,514 Mil.
Total Current Assets was $70,555 Mil.
Total Current Liabilities was $37,006 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 -8,054. ==> 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 28,129. ==> 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 (Mar14)
=-8053.685/354403
=-0.02272465

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=9540.222/344415.618
=0.02769974

Petroleo Brasileiro SA Petrobras's return on assets of this year was -0.02272465. Petroleo Brasileiro SA Petrobras's return on assets of last year was 0.02769974. ==> 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 -8,054. Petroleo Brasileiro SA Petrobras's current cash flow from operations (TTM) was 28,129. ==> 28,129 > -8,054 ==> 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: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=112456/321586.2918
=0.34969152

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=126514/339890.7236
=0.37221963

Petroleo Brasileiro SA Petrobras's gearing of this year was 0.34969152. Petroleo Brasileiro SA Petrobras's gearing of last year was 0.37221963. ==> This year is lower or equal to last year. ==> Score 1.

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: Mar15)=Total Current Assets/Total Current Liabilities
=42881/28167
=1.52238435

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=70555/37006
=1.90658272

Petroleo Brasileiro SA Petrobras's current ratio of this year was 1.52238435. Petroleo Brasileiro SA Petrobras's current ratio of last year was 1.90658272. ==> 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
=33520.607/133661.146
=0.25078797

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=31776.315/140082.535
=0.22683995

Petroleo Brasileiro SA Petrobras's gross margin of this year was 0.25078797. Petroleo Brasileiro SA Petrobras's gross margin of last year was 0.22683995. ==> 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 (Mar14)
=133661.146/354403
=0.37714451

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=140082.535/344415.618
=0.40672527

Petroleo Brasileiro SA Petrobras's asset turnover of this year was 0.37714451. Petroleo Brasileiro SA Petrobras's asset turnover of last year was 0.40672527. ==> 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+1+0+1+1+0
=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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Sep14
Question 1 111111111
Question 2 111111111
Question 3 100100000
Question 4 111111111
Question 5 111001100
Question 6 010011000
Question 7 100100011
Question 8 100010000
Question 9 110100000
F-score 864655444

Petroleo Brasileiro SA Petrobras Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111100
Question 2 1111111111
Question 3 0011000000
Question 4 1111111111
Question 5 0000000001
Question 6 0011010010
Question 7 1100111111
Question 8 0001000011
Question 9 0010000010
F-score 5556454454
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