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Plains All American Pipeline LP (NYSE:PAA)
Beneish M-Score
-2.50 (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 -2.50 suggests that the company is not a manipulator.

PAA' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -0.5
Current: -2.5

-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 -2.32.


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 * 0.9094+0.528 * 1.1244+0.404 * 0.9686+0.892 * 1.0872+0.115 * 1.0911
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8834+4.679 * -0.0195-0.327 * 1.017
=-2.50

* 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:
Accounts Receivable was $3,522 Mil.
Revenue was 11127 + 11195 + 11684 + 10632 = $44,638 Mil.
Gross Profit was 579 + 555 + 678 + 588 = $2,400 Mil.
Total Current Assets was $5,160 Mil.
Total Assets was $21,837 Mil.
Property, Plant and Equipment(Net PPE) was $11,965 Mil.
Depreciation, Depletion and Amortization(DDA) was $403 Mil.
Selling, General & Admin. Expense(SGA) was $340 Mil.
Total Current Liabilities was $5,568 Mil.
Long-Term Debt was $7,613 Mil.
Net Income was 323 + 287 + 384 + 309 = $1,303 Mil.
Non Operating Income was 25 + 27 + 18 + 21 = $91 Mil.
Cash Flow from Operations was 315 + 141 + 822 + 360 = $1,638 Mil.
Accounts Receivable was $3,562 Mil.
Revenue was 10703 + 10295 + 10620 + 9439 = $41,057 Mil.
Gross Profit was 468 + 565 + 843 + 606 = $2,482 Mil.
Total Current Assets was $5,145 Mil.
Total Assets was $20,267 Mil.
Property, Plant and Equipment(Net PPE) was $10,607 Mil.
Depreciation, Depletion and Amortization(DDA) was $391 Mil.
Selling, General & Admin. Expense(SGA) was $354 Mil.
Total Current Liabilities was $5,011 Mil.
Long-Term Debt was $7,018 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)
=(3522 / 44638) / (3562 / 41057)
=0.07890138 / 0.08675743
=0.9094

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)
=(555 / 41057) / (579 / 44638)
=0.06045254 / 0.05376585
=1.1244

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 - (5160 + 11965) / 21837) / (1 - (5145 + 10607) / 20267)
=0.21578056 / 0.22277594
=0.9686

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
=44638 / 41057
=1.0872

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))
=(391 / (391 + 10607)) / (403 / (403 + 11965))
=0.03555192 / 0.03258409
=1.0911

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)
=(340 / 44638) / (354 / 41057)
=0.00761683 / 0.00862216
=0.8834

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)
=((7613 + 5568) / 21837) / ((7018 + 5011) / 20267)
=0.60360855 / 0.59352642
=1.017

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
=(1303 - 91 - 1638) / 21837
=-0.0195

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 -2.50 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.53031.0073.06861.63360.4042.3980.87180.87761.01290.9135
GMI 1.09511.06570.56410.62091.31670.48491.3360.92250.90271.0211
AQI 1.0391.05921.77110.93041.29390.8061.00541.11411.08040.9728
SGI 1.6661.48640.71990.90861.4740.61611.39811.32371.10281.1178
DEPI 1.0090.88891.66370.65730.98281.11560.97391.18230.65471.421
SGAI 0.67910.83961.80361.3470.66192.14050.88140.85421.05490.9391
LVGI 1.03551.02080.97330.9890.96661.03431.00680.90951.01850.9959
TATA 0.00810.04660.0635-0.045-0.04660.01480.0184-0.0906-0.0099-0.0323
M-score -2.17-1.76-0.50-2.51-2.47-2.01-1.96-2.65-2.50-2.55

Plains All American Pipeline LP Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.85650.97291.01291.16471.02080.97350.91340.90550.95630.9094
GMI 0.86130.89790.90360.78910.88720.95671.01981.26121.24141.1244
AQI 1.08341.07221.08040.78561.03841.00640.97280.98180.96770.9686
SGI 1.21621.14171.10281.0951.08121.10241.11781.1051.11351.0872
DEPI 1.17930.79890.65470.61670.59391.19291.4211.43961.43691.0911
SGAI 0.96361.10331.05491.01670.98580.89450.93910.87430.86020.8834
LVGI 0.98950.98481.01850.97450.97111.00910.99591.02331.03231.017
TATA -0.0337-0.0265-0.0099-0.0287-0.05-0.0315-0.0323-0.0315-0.0213-0.0195
M-score -2.59-2.56-2.50-2.61-2.70-2.54-2.55-2.43-2.34-2.50
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