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Plains All American Pipeline LP (NYSE:PAA)
Beneish M-Score
-2.50 (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 -2.50 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: -2.5

-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 -2.47.


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 * 1.5157+0.528 * 0.8069+0.404 * 0.9474+0.892 * 0.6963+0.115 * 0.9167
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3657+4.679 * -0.0077-0.327 * 0.9636
=-2.50

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,946 Mil.
Revenue was 5170 + 4950 + 4111 + 4996 = $19,227 Mil.
Gross Profit was 452 + 423 + 463 + 518 = $1,856 Mil.
Total Current Assets was $3,773 Mil.
Total Assets was $23,507 Mil.
Property, Plant and Equipment(Net PPE) was $13,811 Mil.
Depreciation, Depletion and Amortization(DDA) was $464 Mil.
Selling, General & Admin. Expense(SGA) was $271 Mil.
Total Current Liabilities was $4,077 Mil.
Long-Term Debt was $9,634 Mil.
Net Income was 264 + 101 + 202 + 246 = $813 Mil.
Non Operating Income was 63 + 65 + 52 + 49 = $229 Mil.
Cash Flow from Operations was 255 + -248 + 635 + 122 = $764 Mil.
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 $410 Mil.
Selling, General & Admin. Expense(SGA) was $285 Mil.
Total Current Liabilities was $3,478 Mil.
Long-Term Debt was $9,970 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)
=(1946 / 19227) / (1844 / 27615)
=0.10121184 / 0.0667753
=1.5157

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)
=(2151 / 27615) / (1856 / 19227)
=0.07789245 / 0.09653092
=0.8069

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 - (3773 + 13811) / 23507) / (1 - (2958 + 13350) / 22217)
=0.2519675 / 0.2659675
=0.9474

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
=19227 / 27615
=0.6963

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))
=(410 / (410 + 13350)) / (464 / (464 + 13811))
=0.02979651 / 0.03250438
=0.9167

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)
=(271 / 19227) / (285 / 27615)
=0.01409476 / 0.01032048
=1.3657

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)
=((9634 + 4077) / 23507) / ((9970 + 3478) / 22217)
=0.58327307 / 0.60530225
=0.9636

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
=(813 - 229 - 764) / 23507
=-0.0077

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 -2.50 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 local exchange's 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 1.77110.93041.29390.8061.00541.11411.08040.97281.15171.0129
SGI 0.71990.90861.4740.61611.39811.32371.10281.11781.02880.5327
DEPI 1.66370.65730.98281.11560.97391.18230.65471.45871.07560.9767
SGAI 1.80361.3470.66192.14050.88140.85421.05490.93910.881.6058
LVGI 0.97330.9890.96661.03431.00680.90951.01850.99591.0181.0199
TATA 0.0635-0.045-0.04660.01480.0184-0.0906-0.0099-0.0323-0.0327-0.0277
M-score -0.50-2.51-2.47-2.01-1.96-2.65-2.50-2.54-2.79-3.05

Plains All American Pipeline LP Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.95630.90940.69870.56340.960.84631.28151.50831.26891.5157
GMI 1.24141.12441.01030.83950.77120.69030.67770.71660.69060.8069
AQI 0.96770.96861.15171.19421.1781.23261.01290.98440.99630.9474
SGI 1.11351.08721.02880.87090.75070.61860.53270.56520.59080.6963
DEPI 1.47271.11791.07561.07961.08531.06730.97670.9720.78130.9167
SGAI 0.86020.88340.881.05421.18371.3551.60591.50451.45811.3657
LVGI 1.03231.0171.0180.94690.99591.00281.01990.96810.9810.9636
TATA -0.0213-0.0195-0.0327-0.0346-0.0318-0.0479-0.0277-0.0279-0.0207-0.0077
M-score -2.34-2.50-2.79-3.15-2.96-3.31-3.05-2.77-2.96-2.50
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