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Plains All American Pipeline LP (NYSE:PAA)
Beneish M-Score
-2.76 (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.

Plains All American Pipeline LP has a M-score of -2.76 suggests that the company is not a manipulator.

PAA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.31   Max: -0.5
Current: -2.76

-3.31
-0.5

During the past 13 years, the highest Beneish M-Score of Plains All American Pipeline LP was -0.50. The lowest was -3.31. And the median was -2.44.


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 Plains All American Pipeline LP 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 * 1.5083+0.528 * 0.7166+0.404 * 0.9844+0.892 * 0.5652+0.115 * 1.005
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.5045+4.679 * -0.0279-0.327 * 0.9681
=-2.76

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $1,549 Mil.
Revenue was 4111 + 4996 + 5551 + 6663 = $21,321 Mil.
Gross Profit was 463 + 518 + 502 + 398 = $1,881 Mil.
Total Current Assets was $2,780 Mil.
Total Assets was $22,297 Mil.
Property, Plant and Equipment(Net PPE) was $13,670 Mil.
Depreciation, Depletion and Amortization(DDA) was $439 Mil.
Selling, General & Admin. Expense(SGA) was $267 Mil.
Total Current Liabilities was $3,063 Mil.
Long-Term Debt was $9,153 Mil.
Net Income was 202 + 246 + 249 + 124 = $821 Mil.
Non Operating Income was 52 + 49 + 41 + 53 = $195 Mil.
Cash Flow from Operations was 635 + 122 + 562 + -72 = $1,247 Mil.
Accounts Receivable was $1,817 Mil.
Revenue was 5942 + 9459 + 11127 + 11195 = $37,723 Mil.
Gross Profit was 554 + 697 + 579 + 555 = $2,385 Mil.
Total Current Assets was $3,453 Mil.
Total Assets was $21,724 Mil.
Property, Plant and Equipment(Net PPE) was $12,484 Mil.
Depreciation, Depletion and Amortization(DDA) was $403 Mil.
Selling, General & Admin. Expense(SGA) was $314 Mil.
Total Current Liabilities was $3,531 Mil.
Long-Term Debt was $8,763 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)
=(1549 / 21321) / (1817 / 37723)
=0.07265138 / 0.0481669
=1.5083

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)
=(2385 / 37723) / (1881 / 21321)
=0.06322403 / 0.08822288
=0.7166

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 - (2780 + 13670) / 22297) / (1 - (3453 + 12484) / 21724)
=0.26223259 / 0.26638741
=0.9844

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
=21321 / 37723
=0.5652

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))
=(403 / (403 + 12484)) / (439 / (439 + 13670))
=0.03127182 / 0.03111489
=1.005

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)
=(267 / 21321) / (314 / 37723)
=0.01252286 / 0.00832383
=1.5045

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)
=((9153 + 3063) / 22297) / ((8763 + 3531) / 21724)
=0.5478764 / 0.56591788
=0.9681

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
=(821 - 195 - 1247) / 22297
=-0.0279

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.

Plains All American Pipeline LP has a M-score of -2.76 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 own currency.

Plains All American Pipeline LP Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 3.06881.63350.4042.3980.87180.87761.01290.91350.69871.2815
GMI 0.5650.62091.31670.48491.3360.92250.90271.02111.00990.6775
AQI 1.77110.93041.29390.8061.00541.11411.08040.97281.16031.0054
SGI 0.71990.90861.4740.61611.39811.32371.10281.11781.02880.5327
DEPI 1.68950.64720.98281.11560.97391.18230.65471.4211.08230.9964
SGAI 1.80231.34790.66192.14050.88140.85421.05490.93910.881.6058
LVGI 0.97330.9890.96661.03431.00680.90951.01850.99591.01971.0181
TATA 0.0627-0.045-0.04330.01480.0184-0.0906-0.0099-0.0323-0.0326-0.0277
M-score -0.50-2.51-2.46-2.01-1.96-2.65-2.50-2.55-2.79-3.05

Plains All American Pipeline LP Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 0.91340.90550.95630.90940.69870.56340.960.84631.28151.5083
GMI 1.01981.26121.24141.12441.01030.83950.77120.69030.67770.7166
AQI 0.97280.98180.96770.96861.16031.19421.1781.23261.00540.9844
SGI 1.11781.1051.11351.08721.02880.87090.75070.61860.53270.5652
DEPI 1.4211.43961.43691.09111.08231.07781.07841.05610.99641.005
SGAI 0.93910.87430.86020.88340.881.05421.18371.3551.60591.5045
LVGI 0.99591.02331.03231.0171.01970.94690.99591.00281.01810.9681
TATA -0.0323-0.0315-0.0213-0.0195-0.0326-0.0346-0.0318-0.0479-0.0277-0.0279
M-score -2.55-2.43-2.34-2.50-2.79-3.15-2.96-3.31-3.05-2.76
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