Switch to:
Plains All American Pipeline LP (NYSE:PAA)
Beneish M-Score
-3.15 (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 -3.15 suggests that the company is not a manipulator.

PAA' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -0.5
Current: -3.15

-3.28
-0.5

During the past 13 years, the highest Beneish M-Score of Plains All American Pipeline LP was -0.50. The lowest was -3.28. And the median was -2.34.


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 * 0.5634+0.528 * 0.8395+0.404 * 1.1942+0.892 * 0.8709+0.115 * 1.0778
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0542+4.679 * -0.0346-0.327 * 0.9469
=-3.15

* 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:
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.
Net Income was 283 + 390 + 323 + 287 = $1,283 Mil.
Non Operating Income was 33 + 35 + 25 + 27 = $120 Mil.
Cash Flow from Operations was 732 + 726 + 315 + 141 = $1,914 Mil.
Accounts Receivable was $3,703 Mil.
Revenue was 11684 + 10632 + 10703 + 10295 = $43,314 Mil.
Gross Profit was 678 + 588 + 468 + 565 = $2,299 Mil.
Total Current Assets was $4,932 Mil.
Total Assets was $20,702 Mil.
Property, Plant and Equipment(Net PPE) was $11,152 Mil.
Depreciation, Depletion and Amortization(DDA) was $389 Mil.
Selling, General & Admin. Expense(SGA) was $342 Mil.
Total Current Liabilities was $5,554 Mil.
Long-Term Debt was $6,818 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)
=(1817 / 37723) / (3703 / 43314)
=0.0481669 / 0.08549199
=0.5634

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)
=(697 / 43314) / (554 / 37723)
=0.05307753 / 0.06322403
=0.8395

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 - (3453 + 12484) / 21724) / (1 - (4932 + 11152) / 20702)
=0.26638741 / 0.22307023
=1.1942

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
=37723 / 43314
=0.8709

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))
=(389 / (389 + 11152)) / (403 / (403 + 12484))
=0.03370592 / 0.03127182
=1.0778

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)
=(314 / 37723) / (342 / 43314)
=0.00832383 / 0.00789583
=1.0542

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)
=((8763 + 3531) / 21724) / ((6818 + 5554) / 20702)
=0.56591788 / 0.59762342
=0.9469

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
=(1283 - 120 - 1914) / 21724
=-0.0346

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 -3.15 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.0073.06861.63360.4042.3980.87180.87761.01290.91350.6987
GMI 1.06570.56410.62091.31670.48491.3360.92250.90271.02111.0099
AQI 1.05921.77110.93041.29390.8061.00541.11411.08040.97281.1603
SGI 1.48640.71990.90861.4740.61611.39811.32371.10281.11781.0288
DEPI 0.88891.66370.65730.98281.11560.97391.18230.65471.4211.0823
SGAI 0.83961.80361.3470.66192.14050.88140.85421.05490.93910.88
LVGI 1.02080.97330.9890.96661.03431.00680.90951.01850.99591.0197
TATA 0.04660.0635-0.045-0.04660.01480.0184-0.0906-0.0099-0.0323-0.0326
M-score -1.76-0.50-2.51-2.47-2.01-1.96-2.65-2.50-2.55-2.79

Plains All American Pipeline LP Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.01291.16471.02080.97350.91340.90550.95630.90940.69870.5634
GMI 0.90360.78910.88720.95671.01981.26121.24141.12441.01030.8395
AQI 1.08040.78561.03841.00640.97280.98180.96770.96861.16031.1942
SGI 1.10281.0951.08121.10241.11781.1051.11351.08721.02880.8709
DEPI 0.65470.61670.59391.19291.4211.43961.43691.09111.08231.0778
SGAI 1.05491.01670.98580.89450.93910.87430.86020.88340.881.0542
LVGI 1.01850.97450.97111.00910.99591.02331.03231.0171.01970.9469
TATA -0.0099-0.0287-0.05-0.0315-0.0323-0.0315-0.0213-0.0195-0.0326-0.0346
M-score -2.50-2.61-2.70-2.54-2.55-2.43-2.34-2.50-2.79-3.15
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK