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Plains All American Pipeline LP (NYSE:PAA)
Beneish M-Score
-2.43 (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 -2.43 suggests that the company is not a manipulator.

PAA' s 10-Year Beneish M-Score Range
Min: -3.28   Max: -0.5
Current: -2.43

-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 -2.28.


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 * 0.9055+0.528 * 1.2612+0.404 * 0.9818+0.892 * 1.105+0.115 * 1.4396
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8743+4.679 * -0.0315-0.327 * 1.0233
=-2.43

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
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.
Net Income was 384 + 309 + 231 + 292 = $1,216 Mil.
Non Operating Income was 18 + 21 + 22 + 10 = $71 Mil.
Cash Flow from Operations was 822 + 360 + 257 + 358 = $1,797 Mil.
Accounts Receivable was $3,701 Mil.
Revenue was 10620 + 9439 + 9354 + 9786 = $39,199 Mil.
Gross Profit was 843 + 606 + 538 + 637 = $2,624 Mil.
Total Current Assets was $5,140 Mil.
Total Assets was $19,440 Mil.
Property, Plant and Equipment(Net PPE) was $9,883 Mil.
Depreciation, Depletion and Amortization(DDA) was $504 Mil.
Selling, General & Admin. Expense(SGA) was $354 Mil.
Total Current Liabilities was $5,022 Mil.
Long-Term Debt was $6,331 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)
=(3703 / 43314) / (3701 / 39199)
=0.08549199 / 0.09441567
=0.9055

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)
=(588 / 39199) / (678 / 43314)
=0.06694048 / 0.05307753
=1.2612

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 - (4932 + 11152) / 20702) / (1 - (5140 + 9883) / 19440)
=0.22307023 / 0.22721193
=0.9818

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
=43314 / 39199
=1.105

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))
=(504 / (504 + 9883)) / (389 / (389 + 11152))
=0.04852219 / 0.03370592
=1.4396

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)
=(342 / 43314) / (354 / 39199)
=0.00789583 / 0.00903084
=0.8743

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)
=((6818 + 5554) / 20702) / ((6331 + 5022) / 19440)
=0.59762342 / 0.58400206
=1.0233

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
=(1216 - 71 - 1797) / 20702
=-0.0315

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 -2.43 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 0.00810.04660.0635-0.045-0.04660.01480.0552-0.0906-0.0099-0.0323
M-score -2.17-1.76-0.50-2.51-2.47-2.01-1.79-2.65-2.50-2.55

Plains All American Pipeline LP Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.87760.71190.85650.97291.01291.16471.02080.97350.91340.9055
GMI 0.9220.93820.86130.89790.90360.78910.88720.95671.01981.2612
AQI 1.11411.4211.08341.07221.08040.78561.03841.00640.97280.9818
SGI 1.32371.30351.21621.14171.10281.0951.08121.10241.11781.105
DEPI 1.18231.13971.17930.79890.65470.61670.59391.19291.4211.4396
SGAI 0.85430.91030.96361.10331.05491.01670.98580.89450.93910.8743
LVGI 0.90950.97890.98950.98481.01850.97450.97111.00910.99591.0233
TATA -0.0904-0.0607-0.0337-0.0265-0.0099-0.0287-0.05-0.0315-0.0323-0.0315
M-score -2.65-2.58-2.59-2.56-2.50-2.61-2.70-2.54-2.55-2.43
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