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Plains All American Pipeline LP (NYSE:PAA)
Beneish M-Score
-3.31 (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 -3.31 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: -3.31

-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 -2.42.


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 * 0.8463+0.528 * 0.6903+0.404 * 1.2326+0.892 * 0.6186+0.115 * 1.0561
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.355+4.679 * -0.0479-0.327 * 1.0028
=-3.31

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $1,844 Mil.
Revenue was 5551 + 6663 + 5942 + 9459 = $27,615 Mil.
Gross Profit was 502 + 398 + 554 + 697 = $2,151 Mil.
Total Current Assets was $2,958 Mil.
Total Assets was $22,217 Mil.
Property, Plant and Equipment(Net PPE) was $13,350 Mil.
Depreciation, Depletion and Amortization(DDA) was $425 Mil.
Selling, General & Admin. Expense(SGA) was $285 Mil.
Total Current Liabilities was $3,478 Mil.
Long-Term Debt was $9,970 Mil.
Net Income was 249 + 124 + 283 + 390 = $1,046 Mil.
Non Operating Income was 41 + 53 + 33 + 35 = $162 Mil.
Cash Flow from Operations was 562 + -72 + 732 + 726 = $1,948 Mil.
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.



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)
=(1844 / 27615) / (3522 / 44638)
=0.0667753 / 0.07890138
=0.8463

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)
=(398 / 44638) / (502 / 27615)
=0.05376585 / 0.07789245
=0.6903

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 - (2958 + 13350) / 22217) / (1 - (5160 + 11965) / 21837)
=0.2659675 / 0.21578056
=1.2326

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
=27615 / 44638
=0.6186

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))
=(403 / (403 + 11965)) / (425 / (425 + 13350))
=0.03258409 / 0.03085299
=1.0561

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)
=(285 / 27615) / (340 / 44638)
=0.01032048 / 0.00761683
=1.355

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)
=((9970 + 3478) / 22217) / ((7613 + 5568) / 21837)
=0.60530225 / 0.60360855
=1.0028

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
=(1046 - 162 - 1948) / 22217
=-0.0479

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 -3.31 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

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.02080.97350.91340.90550.95630.90940.69870.56340.960.8463
GMI 0.88720.95671.01981.26121.24141.12441.01030.83950.77120.6903
AQI 1.03841.00640.97280.98180.96770.96861.16031.19421.1781.2326
SGI 1.08121.10241.11781.1051.11351.08721.02880.87090.75070.6186
DEPI 0.59391.19291.4211.43961.43691.09111.08231.07781.07841.0561
SGAI 0.98580.89450.93910.87430.86020.88340.881.05421.18371.355
LVGI 0.97111.00910.99591.02331.03231.0171.01970.94690.99591.0028
TATA -0.05-0.0315-0.0323-0.0315-0.0213-0.0195-0.0326-0.0346-0.0318-0.0479
M-score -2.70-2.54-2.55-2.43-2.34-2.50-2.79-3.15-2.96-3.31
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