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Plains All American Pipeline LP (NYSE:PAA)
Beneish M-Score
-2.79 (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 -2.79 suggests that the company is not a manipulator.

PAA' s 10-Year Beneish M-Score Range
Min: -2.79   Max: -0.5
Current: -2.79

-2.79
-0.5

During the past 13 years, the highest Beneish M-Score of Plains All American Pipeline LP was -0.50. The lowest was -2.79. 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 * 0.6987+0.528 * 1.0103+0.404 * 1.1603+0.892 * 1.0288+0.115 * 1.0823
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.88+4.679 * -0.0326-0.327 * 1.0197
=-2.79

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

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $2,615 Mil.
Revenue was 9459 + 11127 + 11195 + 11684 = $43,465 Mil.
Gross Profit was 697 + 579 + 555 + 678 = $2,509 Mil.
Total Current Assets was $4,179 Mil.
Total Assets was $22,256 Mil.
Property, Plant and Equipment(Net PPE) was $12,272 Mil.
Depreciation, Depletion and Amortization(DDA) was $392 Mil.
Selling, General & Admin. Expense(SGA) was $325 Mil.
Total Current Liabilities was $4,755 Mil.
Long-Term Debt was $8,762 Mil.
Net Income was 390 + 323 + 287 + 384 = $1,384 Mil.
Non Operating Income was 35 + 25 + 27 + 18 = $105 Mil.
Cash Flow from Operations was 726 + 315 + 141 + 822 = $2,004 Mil.
Accounts Receivable was $3,638 Mil.
Revenue was 10632 + 10703 + 10295 + 10620 = $42,250 Mil.
Gross Profit was 588 + 468 + 565 + 843 = $2,464 Mil.
Total Current Assets was $4,964 Mil.
Total Assets was $20,360 Mil.
Property, Plant and Equipment(Net PPE) was $10,819 Mil.
Depreciation, Depletion and Amortization(DDA) was $375 Mil.
Selling, General & Admin. Expense(SGA) was $359 Mil.
Total Current Liabilities was $5,411 Mil.
Long-Term Debt was $6,715 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)
=(2615 / 43465) / (3638 / 42250)
=0.06016335 / 0.08610651
=0.6987

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)
=(579 / 42250) / (697 / 43465)
=0.05831953 / 0.05772461
=1.0103

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 - (4179 + 12272) / 22256) / (1 - (4964 + 10819) / 20360)
=0.26082854 / 0.22480354
=1.1603

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
=43465 / 42250
=1.0288

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))
=(375 / (375 + 10819)) / (392 / (392 + 12272))
=0.03350009 / 0.03095389
=1.0823

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)
=(325 / 43465) / (359 / 42250)
=0.00747728 / 0.00849704
=0.88

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)
=((8762 + 4755) / 22256) / ((6715 + 5411) / 20360)
=0.60734184 / 0.59557957
=1.0197

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
=(1384 - 105 - 2004) / 22256
=-0.0326

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 -2.79 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

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.97291.01291.16471.02080.97350.91340.90550.95630.90940.6987
GMI 0.89790.90360.78910.88720.95671.01981.26121.24141.12441.0103
AQI 1.07221.08040.78561.03841.00640.97280.98180.96770.96861.1603
SGI 1.14171.10281.0951.08121.10241.11781.1051.11351.08721.0288
DEPI 0.79890.65470.61670.59391.19291.4211.43961.43691.09111.0823
SGAI 1.10331.05491.01670.98580.89450.93910.87430.86020.88340.88
LVGI 0.98481.01850.97450.97111.00910.99591.02331.03231.0171.0197
TATA -0.0265-0.0099-0.0287-0.05-0.0315-0.0323-0.0315-0.0213-0.0195-0.0326
M-score -2.56-2.50-2.61-2.70-2.54-2.55-2.43-2.34-2.50-2.79
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