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Plains All American Pipeline LP (NYSE:PAA)
Beneish M-Score
-2.34 (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 -2.34 suggests that the company is not a manipulator.

PAA' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -0.5
Current: -2.34

-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 -2.31.


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 * 0.9563+0.528 * 1.2414+0.404 * 0.9677+0.892 * 1.1135+0.115 * 1.4369
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8602+4.679 * -0.0213-0.327 * 1.0323
=-2.34

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $3,730 Mil.
Revenue was 11195 + 11684 + 10632 + 10703 = $44,214 Mil.
Gross Profit was 555 + 678 + 588 + 468 = $2,289 Mil.
Total Current Assets was $5,168 Mil.
Total Assets was $21,495 Mil.
Property, Plant and Equipment(Net PPE) was $11,613 Mil.
Depreciation, Depletion and Amortization(DDA) was $398 Mil.
Selling, General & Admin. Expense(SGA) was $341 Mil.
Total Current Liabilities was $5,423 Mil.
Long-Term Debt was $7,414 Mil.
Net Income was 287 + 384 + 309 + 231 = $1,211 Mil.
Non Operating Income was 27 + 18 + 21 + 22 = $88 Mil.
Cash Flow from Operations was 141 + 822 + 360 + 257 = $1,580 Mil.
Accounts Receivable was $3,503 Mil.
Revenue was 10295 + 10620 + 9439 + 9354 = $39,708 Mil.
Gross Profit was 565 + 843 + 606 + 538 = $2,552 Mil.
Total Current Assets was $4,841 Mil.
Total Assets was $19,424 Mil.
Property, Plant and Equipment(Net PPE) was $10,181 Mil.
Depreciation, Depletion and Amortization(DDA) was $509 Mil.
Selling, General & Admin. Expense(SGA) was $356 Mil.
Total Current Liabilities was $4,924 Mil.
Long-Term Debt was $6,313 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)
=(3730 / 44214) / (3503 / 39708)
=0.08436242 / 0.088219
=0.9563

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)
=(678 / 39708) / (555 / 44214)
=0.06426916 / 0.05177093
=1.2414

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 - (5168 + 11613) / 21495) / (1 - (4841 + 10181) / 19424)
=0.21930682 / 0.22662685
=0.9677

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
=44214 / 39708
=1.1135

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))
=(509 / (509 + 10181)) / (398 / (398 + 11613))
=0.04761459 / 0.03313629
=1.4369

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)
=(341 / 44214) / (356 / 39708)
=0.00771249 / 0.00896545
=0.8602

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)
=((7414 + 5423) / 21495) / ((6313 + 4924) / 19424)
=0.59720865 / 0.57851112
=1.0323

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
=(1211 - 88 - 1580) / 21495
=-0.0213

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 -2.34 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 0.53021.0073.06881.63350.4042.3980.87180.87761.01290.9135
GMI 1.09291.06560.5650.62091.31670.48491.3360.92250.90271.0211
AQI 1.0391.05921.77110.93041.29390.8061.00541.11411.08040.9728
SGI 1.66611.48640.71990.90861.4740.61611.39811.32371.10281.1178
DEPI 1.04340.87071.68950.64720.98281.11560.97391.18230.65471.421
SGAI 0.68010.83911.80231.34790.66192.14050.88140.85421.05490.9391
LVGI 1.03551.02070.97330.9890.96661.03431.00680.90951.01850.9959
TATA 0.00870.04680.0634-0.045-0.04330.01480.0184-0.0906-0.0099-0.0323
M-score -2.16-1.76-0.50-2.51-2.46-2.01-1.96-2.65-2.50-2.55

Plains All American Pipeline LP Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.71190.85650.97291.01291.16471.02080.97350.91340.90550.9563
GMI 0.93820.86130.89790.90360.78910.88720.95671.01981.26121.2414
AQI 1.4211.08341.07221.08040.78561.03841.00640.97280.98180.9677
SGI 1.30351.21621.14171.10281.0951.08121.10241.11781.1051.1135
DEPI 1.13971.17930.79890.65470.61670.59391.19291.4211.43961.4369
SGAI 0.91030.96361.10331.05491.01670.98580.89450.93910.87430.8602
LVGI 0.97890.98950.98481.01850.97450.97111.00910.99591.02331.0323
TATA -0.0607-0.0337-0.0265-0.0099-0.0287-0.05-0.0315-0.0323-0.0315-0.0213
M-score -2.58-2.59-2.56-2.50-2.61-2.70-2.54-2.55-2.43-2.34
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