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Plains All American Pipeline LP (NYSE:PAA)
Beneish M-Score
-2.95 (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 -2.95 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: -2.95

-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 -2.46.


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 * 1.2689+0.528 * 0.6906+0.404 * 0.9963+0.892 * 0.5908+0.115 * 0.8132
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4581+4.679 * -0.0207-0.327 * 0.981
=-2.95

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $2,015 Mil.
Revenue was 4950 + 4111 + 4996 + 5551 = $19,608 Mil.
Gross Profit was 423 + 463 + 518 + 502 = $1,906 Mil.
Total Current Assets was $3,603 Mil.
Total Assets was $23,163 Mil.
Property, Plant and Equipment(Net PPE) was $13,598 Mil.
Depreciation, Depletion and Amortization(DDA) was $534 Mil.
Selling, General & Admin. Expense(SGA) was $261 Mil.
Total Current Liabilities was $4,029 Mil.
Long-Term Debt was $9,486 Mil.
Net Income was 101 + 202 + 246 + 249 = $798 Mil.
Non Operating Income was 65 + 52 + 49 + 41 = $207 Mil.
Cash Flow from Operations was -248 + 635 + 122 + 562 = $1,071 Mil.
Accounts Receivable was $2,688 Mil.
Revenue was 6663 + 5942 + 9459 + 11127 = $33,191 Mil.
Gross Profit was 398 + 554 + 697 + 579 = $2,228 Mil.
Total Current Assets was $3,944 Mil.
Total Assets was $22,884 Mil.
Property, Plant and Equipment(Net PPE) was $13,028 Mil.
Depreciation, Depletion and Amortization(DDA) was $413 Mil.
Selling, General & Admin. Expense(SGA) was $303 Mil.
Total Current Liabilities was $4,474 Mil.
Long-Term Debt was $9,137 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)
=(2015 / 19608) / (2688 / 33191)
=0.10276418 / 0.08098581
=1.2689

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)
=(2228 / 33191) / (1906 / 19608)
=0.06712663 / 0.09720522
=0.6906

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 - (3603 + 13598) / 23163) / (1 - (3944 + 13028) / 22884)
=0.25739326 / 0.25834644
=0.9963

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
=19608 / 33191
=0.5908

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))
=(413 / (413 + 13028)) / (534 / (534 + 13598))
=0.03072688 / 0.03778658
=0.8132

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)
=(261 / 19608) / (303 / 33191)
=0.01331089 / 0.00912898
=1.4581

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)
=((9486 + 4029) / 23163) / ((9137 + 4474) / 22884)
=0.58347364 / 0.59478238
=0.981

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
=(798 - 207 - 1071) / 23163
=-0.0207

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 -2.95 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 3.06861.63360.4042.3980.87180.87761.01290.91350.69871.2815
GMI 0.56410.62091.31670.48491.3360.92250.90271.02111.00990.6775
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 1.66370.65730.98281.11560.97391.18230.65471.4211.08230.9964
SGAI 1.80361.3470.66192.14050.88140.85421.05490.93910.881.6058
LVGI 0.97330.9890.96661.03431.00680.90951.01850.99591.01971.0181
TATA 0.0635-0.045-0.04660.01480.0184-0.0906-0.0099-0.0323-0.0326-0.0277
M-score -0.50-2.51-2.47-2.01-1.96-2.65-2.50-2.55-2.79-3.05

Plains All American Pipeline LP Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 0.90550.95630.90940.69870.56340.960.84631.28151.50831.2689
GMI 1.26121.24141.12441.01030.83950.77120.69030.67770.71660.6906
AQI 0.98180.96770.96861.16031.19421.1781.23261.00540.98440.9963
SGI 1.1051.11351.08721.02880.87090.75070.61860.53270.56520.5908
DEPI 1.43961.43691.09111.08231.07781.07841.05610.99641.0050.8132
SGAI 0.87430.86020.88340.881.05421.18371.3551.60591.50451.4581
LVGI 1.02331.03231.0171.01970.94690.99591.00281.01810.96810.981
TATA -0.0315-0.0213-0.0195-0.0326-0.0346-0.0318-0.0479-0.0277-0.0279-0.0207
M-score -2.43-2.34-2.50-2.79-3.15-2.96-3.31-3.05-2.76-2.95
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