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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-2.93 (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.

Petroleo Brasileiro SA Petrobras has a M-score of -2.97 suggests that the company is not a manipulator.

PBR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.38   Max: -1.52
Current: -2.93

-3.38
-1.52

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.52. The lowest was -3.38. And the median was -2.50.


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 Petroleo Brasileiro SA Petrobras 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 * 1.3187+0.528 * 0.8183+0.404 * 0.9717+0.892 * 0.6627+0.115 * 0.989
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0606+4.679 * -0.0735-0.327 * 1.0632
=-2.97

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

This Year (Mar16) TTM:Last Year (Mar15) TTM:
Accounts Receivable was $8,283 Mil.
Revenue was 17989 + 22147 + 23179 + 25600.93 = $88,916 Mil.
Gross Profit was 5373 + 6987 + 6695 + 8185.97 = $27,241 Mil.
Total Current Assets was $41,094 Mil.
Total Assets was $241,413 Mil.
Property, Plant and Equipment(Net PPE) was $176,914 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,099 Mil.
Selling, General & Admin. Expense(SGA) was $8,032 Mil.
Total Current Liabilities was $30,193 Mil.
Long-Term Debt was $108,991 Mil.
Net Income was -318 + -9421 + -1062 + 170.047 = $-10,631 Mil.
Non Operating Income was -1862 + -14374 + -1426 + -307.43 = $-17,969 Mil.
Cash Flow from Operations was 4428 + 6577 + 6745.132 + 7330.289 = $25,080 Mil.
Accounts Receivable was $9,479 Mil.
Revenue was 25967 + 31940.146 + 38844 + 37429.959 = $134,181 Mil.
Gross Profit was 7827 + 8268.607 + 8985 + 8558.616 = $33,639 Mil.
Total Current Assets was $42,881 Mil.
Total Assets was $259,335 Mil.
Property, Plant and Equipment(Net PPE) was $190,579 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,881 Mil.
Selling, General & Admin. Expense(SGA) was $11,427 Mil.
Total Current Liabilities was $28,167 Mil.
Long-Term Debt was $112,456 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)
=(8283 / 88915.93) / (9479 / 134181.105)
=0.09315541 / 0.07064333
=1.3187

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)
=(33639.223 / 134181.105) / (27240.97 / 88915.93)
=0.25070015 / 0.30636771
=0.8183

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 - (41094 + 176914) / 241413) / (1 - (42881 + 190579) / 259335)
=0.09695004 / 0.09977442
=0.9717

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
=88915.93 / 134181.105
=0.6627

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))
=(12880.78 / (12880.78 + 190579)) / (12098.838 / (12098.838 + 176914))
=0.06330873 / 0.06401067
=0.989

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)
=(8031.595 / 88915.93) / (11427.342 / 134181.105)
=0.09032796 / 0.08516357
=1.0606

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)
=((108991 + 30193) / 241413) / ((112456 + 28167) / 259335)
=0.57653896 / 0.54224459
=1.0632

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
=(-10630.953 - -17969.43 - 25080.421) / 241413
=-0.0735

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.

Petroleo Brasileiro SA Petrobras has a M-score of -2.97 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.

Petroleo Brasileiro SA Petrobras Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.79450.85430.75041.57960.99690.91490.9561.34380.79231.0716
GMI 1.04421.0021.12680.82741.17551.24321.25091.0810.98660.7762
AQI 1.01461.4040.90060.94730.79372.66340.91780.61160.78871.116
SGI 1.28451.21271.34790.77691.30681.21540.98760.98171.01550.6774
DEPI 1.01780.95110.94381.30421.33840.68631.06050.9410.97350.8382
SGAI 1.05620.84910.98171.20460.9620.88851.14290.84921.17311
LVGI 0.77370.84791.27141.08840.771.12081.08181.19081.14751.2027
TATA -0.0742-0.0478-0.0815-0.045-0.0324-0.0329-0.0386-0.0412-0.0363-0.0571
M-score -2.67-2.41-2.85-2.50-2.23-1.78-2.66-2.53-3.00-3.13

Petroleo Brasileiro SA Petrobras Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.40041.89420.94590.75370.7960.62820.77240.87941.07161.3187
GMI 1.08831.06381.1141.05990.98350.91370.81910.78230.77830.8183
AQI 0.61160.57640.5920.48220.76690.82130.80681.04951.14760.9717
SGI 0.9420.94170.94840.99011.00840.95790.8620.72890.6790.6627
DEPI 0.94031.00011.15041.17670.97930.8120.84180.74340.81750.989
SGAI 0.70540.70730.6970.80351.39651.4841.61521.25911.09741.0606
LVGI 1.19081.27871.1251.19251.15111.17521.22181.26951.1991.0632
TATA -0.0354-0.0276-0.028-0.0389-0.0946-0.1112-0.116-0.1323-0.0761-0.0735
M-score -2.46-2.02-2.78-3.08-3.33-3.66-3.73-3.71-3.22-2.97
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