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GuruFocus has detected 3 Warning Signs with Gazprom PJSC $OGZPY.
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Gazprom PJSC (OTCPK:OGZPY)
Beneish M-Score
-2.63 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Gazprom PJSC has a M-score of -2.63 suggests that the company is not a manipulator.

OGZPY' s Beneish M-Score Range Over the Past 10 Years
Min: -3.47   Max: -2.05
Current: -2.63

-3.47
-2.05

During the past 12 years, the highest Beneish M-Score of Gazprom PJSC was -2.05. The lowest was -3.47. And the median was -2.69.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (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 Gazprom PJSC for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9143+0.528 * 1.2448+0.404 * 1.0208+0.892 * 1.0691+0.115 * 0.9748
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.096+4.679 * -0.0594-0.327 * 0.9239
=-2.63

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $10,067 Mil.
Revenue was 21664.8052396 + 22871.5615305 + 29944.2261289 + 32180.2998966 = $106,661 Mil.
Gross Profit was 14727.8007584 + 13672.6990693 + 19553.0506722 + 12837.8317821 = $60,791 Mil.
Total Current Assets was $52,979 Mil.
Total Assets was $287,289 Mil.
Property, Plant and Equipment(Net PPE) was $194,950 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,631 Mil.
Selling, General & Admin. Expense(SGA) was $1,383 Mil.
Total Current Liabilities was $30,313 Mil.
Long-Term Debt was $41,932 Mil.
Net Income was 1760.78938297 + 4220.11375388 + 6244.55360221 + 1950.22406067 = $14,176 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was 4220.66528783 + 4434.07445708 + 11622.3198897 + 10954.7742158 = $31,232 Mil.
Accounts Receivable was $10,299 Mil.
Revenue was 22281.3684936 + 21806.2564633 + 28408.3591865 + 27271.4408825 = $99,767 Mil.
Gross Profit was 16418.0455016 + 14488.6246122 + 20974.3364357 + 18900.396415 = $70,781 Mil.
Total Current Assets was $62,676 Mil.
Total Assets was $282,279 Mil.
Property, Plant and Equipment(Net PPE) was $181,718 Mil.
Depreciation, Depletion and Amortization(DDA) was $8,740 Mil.
Selling, General & Admin. Expense(SGA) was $1,180 Mil.
Total Current Liabilities was $34,292 Mil.
Long-Term Debt was $42,537 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(10066.9424336 / 106660.892796) / (10299.1037573 / 99767.4250259)
=0.09438269 / 0.10323113
=0.9143

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.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(70781.4029645 / 99767.4250259) / (60791.382282 / 106660.892796)
=0.70946407 / 0.56995006
=1.2448

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 plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (52978.5246467 + 194950.293002) / 287288.728025) / (1 - (62676.2323337 + 181718.028266) / 282278.955533)
=0.13700472 / 0.13421013
=1.0208

4. SGI = Sales Growth Index

Ratio of sales 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.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=106660.892796 / 99767.4250259
=1.0691

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation 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.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(8740.27921406 / (8740.27921406 + 181718.028266)) / (9631.31678731 / (9631.31678731 + 194950.293002))
=0.04589077 / 0.04707812
=0.9748

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1382.79903482 / 106660.892796) / (1180.11030679 / 99767.4250259)
=0.01296444 / 0.01182861
=1.096

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$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((41932.0579111 + 30313.0472251) / 287288.728025) / ((42536.9355395 + 34292.0889349) / 282278.955533)
=0.25147212 / 0.27217411
=0.9239

8. TATA = Total Accruals to Total Assets

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

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(14175.6807997 - 0 - 31231.8338504) / 287288.728025
=-0.0594

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Gazprom PJSC has a M-score of -2.63 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Gazprom PJSC Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.92371.04770.94561.09720.84571.51670.81341.04250.85510.9772
GMI 1.97940.39681111.40610.93411.06191.04431.043
AQI 1.39461.44970.86040.96880.95760.76630.84920.9160.95721.0354
SGI 1.59371.0991.35580.91041.20261.28911.02791.10141.06471.0865
DEPI 0.62521.36821.08011.06981.01711.10120.92640.93080.98831.0129
SGAI 0.72980.06640.82713.46690.95496.97661.12120.82520.22980.8748
LVGI 0.67061.54360.86531.01420.86480.99670.96890.95371.26231.0734
TATA 0.01060.0206-0.0322-0.0076-0.0489-0.0306-0.0208-0.0448-0.1157-0.0729
M-score -1.18-2.36-2.34-2.94-2.63-2.79-2.84-2.52-3.05-2.73

Gazprom PJSC Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.95010.85510.98790.91110.97720.91050.9143
GMI 1.10031.0491.02561.09371.23591.27841.2448
AQI 0.90840.95721.00651.12861.03541.01751.0208
SGI 1.05751.06471.06211.05541.08651.08511.0691
DEPI 0.98990.9890.97030.75690.77670.77140.9748
SGAI 0.61980.10310.06090.32243.87285.35091.096
LVGI 1.05931.26231.22351.27191.07341.06880.9239
TATA 0.0106-0.0349-0.0246-0.0683-0.0729-0.0724-0.0594
M-score -2.36-2.64-2.45-2.73-3.17-3.47-2.63
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