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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
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.

Petroleo Brasileiro SA Petrobras has a M-score of -3.37 suggests that the company is not a manipulator.

PBR' s 10-Year Beneish M-Score Range
Min: -3.24   Max: -1.62
Current: -3.31

-3.24
-1.62

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.62. The lowest was -3.24. And the median was -2.45.


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 * 0.5228+0.528 * 1.0338+0.404 * 0.4936+0.892 * 1.0729+0.115 * 1.1588
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.3512+4.679 * -0.0483-0.327 * 1.1785
=-3.37

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $9,219 Mil.
Revenue was 37801.8734762 + 35255.4736136 + 33619.8554839 + 47297.3353217 = $153,975 Mil.
Gross Profit was 9010.22284957 + 8137.91547406 + 8020.46107527 + 10422.2317853 = $35,591 Mil.
Total Current Assets was $61,410 Mil.
Total Assets was $352,903 Mil.
Property, Plant and Equipment(Net PPE) was $255,542 Mil.
Depreciation, Depletion and Amortization(DDA) was $13,625 Mil.
Selling, General & Admin. Expense(SGA) was $11,618 Mil.
Total Current Liabilities was $36,159 Mil.
Long-Term Debt was $129,801 Mil.
Net Income was 1320.41575773 + 2119.21779964 + 2222.22021505 + 3823.05794631 = $9,485 Mil.
Non Operating Income was 61.1660036785 + 566.759838998 + 338.206451613 + -1743.74563272 = $-778 Mil.
Cash Flow from Operations was 10080.4140468 + 6186.14982111 + 3880.11354839 + 7156.93268002 = $27,304 Mil.
Accounts Receivable was $16,436 Mil.
Revenue was 34319.7879859 + 36074.9539807 + 36982.8694556 + 36135.6607315 = $143,513 Mil.
Gross Profit was 7325.53003534 + 9166.561896 + 9613.81602823 + 8187.47256978 = $34,293 Mil.
Total Current Assets was $61,354 Mil.
Total Assets was $339,051 Mil.
Property, Plant and Equipment(Net PPE) was $207,716 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,944 Mil.
Selling, General & Admin. Expense(SGA) was $8,014 Mil.
Total Current Liabilities was $31,278 Mil.
Long-Term Debt was $104,016 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)
=(9218.52944951 / 153974.537895) / (16435.8785336 / 143513.272154)
=0.05987048 / 0.11452515
=0.5228

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)
=(8137.91547406 / 143513.272154) / (9010.22284957 / 153974.537895)
=0.23895616 / 0.23114751
=1.0338

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 - (61410.2399589 + 255542.153214) / 352903.032636) / (1 - (61354.1669611 + 207715.930654) / 339051.431095)
=0.10187115 / 0.2064033
=0.4936

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
=153974.537895 / 143513.272154
=1.0729

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))
=(12943.7701144 / (12943.7701144 + 207715.930654)) / (13625.4398045 / (13625.4398045 + 255542.153214))
=0.05865942 / 0.05062065
=1.1588

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)
=(11618.1176389 / 153974.537895) / (8014.22093038 / 143513.272154)
=0.0754548 / 0.05584306
=1.3512

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)
=((129800.67582 + 36158.5183284) / 352903.032636) / ((104016.472173 + 31277.7155477) / 339051.431095)
=0.47026854 / 0.39903736
=1.1785

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
=(9484.91171874 - -777.613338433 - 27303.6100963) / 352903.032636
=-0.0483

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 -3.37 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.18660.98460.79450.85430.75041.57961.01931.67860.50741.3497
GMI 1.11770.95091.01791.06791.12870.82811.23871.13261.25091.081
AQI 1.14930.83821.01461.38330.91410.94732.36270.86020.90750.6434
SGI 1.23331.53371.24571.21841.30620.80071.31231.23020.96331.0024
DEPI 0.87731.04491.01780.95370.94121.30421.06470.86481.0580.941
SGAI 1.11611.05221.01640.88230.88191.21641.01090.93220.961.011
LVGI 0.89390.88950.86670.85051.13161.10060.75751.13731.08561.1755
TATA -0.0192-0.0321-0.0785-0.0589-0.0833-0.045-0.0329-0.0332-0.0391-0.0412
M-score -2.07-2.23-2.76-2.44-2.82-2.48-1.58-1.84-3.07-2.52

Petroleo Brasileiro SA Petrobras Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.7690.86640.63640.84331.59151.55721.24831.62020.84150.5228
GMI 1.12641.12271.25491.26581.15991.12831.07471.0481.09411.0338
AQI 2.88542.64870.90750.95590.93091.00940.64340.57640.5920.4936
SGI 1.19191.1430.91430.8880.92380.91021.07911.05461.03361.0729
DEPI 0.53070.63111.11191.11711.09731.04070.88530.90491.07851.1588
SGAI 0.93560.94240.77750.77890.77380.79021.24641.26261.34241.3512
LVGI 1.15281.08751.08561.04781.11681.09591.17551.27871.1251.1785
TATA -0.0397-0.0515-0.0402-0.04-0.0439-0.0418-0.0428-0.0334-0.0357-0.0483
M-score -1.97-2.05-2.96-2.75-2.14-2.16-2.60-2.31-2.97-3.37
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