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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-3.19 (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 -3.76 suggests that the company is not a manipulator.

PBR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.29   Max: -1.46
Current: -3.19

-3.29
-1.46

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.46. The lowest was -3.29. And the median was -2.49.


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 * 0.9015+0.528 * 0.7803+0.404 * 1.0495+0.892 * 0.711+0.115 * 0.7608
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1782+4.679 * -0.1469-0.327 * 1.2695
=-3.76

* 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 $7,886 Mil.
Revenue was 23179 + 25600.93 + 22979.522 + 31940.146 = $103,700 Mil.
Gross Profit was 6695 + 8185.97 + 6926.03 + 8268.607 = $30,076 Mil.
Total Current Assets was $44,397 Mil.
Total Assets was $234,479 Mil.
Property, Plant and Equipment(Net PPE) was $165,590 Mil.
Depreciation, Depletion and Amortization(DDA) was $11,793 Mil.
Selling, General & Admin. Expense(SGA) was $8,037 Mil.
Total Current Liabilities was $27,616 Mil.
Long-Term Debt was $114,035 Mil.
Net Income was -1062 + 170.047 + 1647.289 + -9990.685 = $-9,235 Mil.
Non Operating Income was 1668 + -307.43 + -873.712 + -526.577 = $-40 Mil.
Cash Flow from Operations was 6745.132 + 7330.289 + 5558.749 + 5624.08 = $25,258 Mil.
Accounts Receivable was $12,302 Mil.
Revenue was 38844 + 36910 + 34494 + 35593 = $145,841 Mil.
Gross Profit was 8774 + 8528 + 8229 + 7474 = $33,005 Mil.
Total Current Assets was $58,322 Mil.
Total Assets was $332,818 Mil.
Property, Plant and Equipment(Net PPE) was $241,373 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,859 Mil.
Selling, General & Admin. Expense(SGA) was $9,594 Mil.
Total Current Liabilities was $34,560 Mil.
Long-Term Debt was $123,811 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)
=(7886 / 103699.598) / (12302 / 145841)
=0.07604658 / 0.08435214
=0.9015

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)
=(8185.97 / 145841) / (6695 / 103699.598)
=0.2263081 / 0.29002626
=0.7803

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 - (44397 + 165590) / 234479) / (1 - (58322 + 241373) / 332818)
=0.10445285 / 0.09952286
=1.0495

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
=103699.598 / 145841
=0.711

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))
=(12859 / (12859 + 241373)) / (11792.985 / (11792.985 + 165590))
=0.05057979 / 0.06648318
=0.7608

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)
=(8037.164 / 103699.598) / (9594 / 145841)
=0.07750429 / 0.06578397
=1.1782

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)
=((114035 + 27616) / 234479) / ((123811 + 34560) / 332818)
=0.60410954 / 0.47584866
=1.2695

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
=(-9235.349 - -39.719 - 25258.25) / 234479
=-0.1469

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 -3.76 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.98460.79450.85430.75041.57960.99690.91490.9561.34380.7923
GMI 0.95091.01791.02791.12680.82741.12831.29511.25091.0810.9866
AQI 0.83821.01461.4040.90060.94730.79372.66340.91780.61160.7887
SGI 1.46571.28451.21271.34790.77691.30681.21540.98760.98171.0155
DEPI 1.04491.01780.95110.94381.30421.33840.68631.06050.9410.9735
SGAI 1.05221.01641.02210.84741.20460.9620.88851.14290.84921.1731
LVGI 0.88950.86670.7571.27141.08840.771.12081.08181.19081.1475
TATA -0.0321-0.0785-0.0578-0.0815-0.045-0.0324-0.0329-0.0386-0.0412-0.0339
M-score -2.29-2.72-2.45-2.82-2.50-2.26-1.75-2.66-2.53-2.99

Petroleo Brasileiro SA Petrobras Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.39261.39521.40091.8950.95520.75610.79860.63930.78620.9015
GMI 1.04470.93641.08771.06311.1111.06450.98750.92170.82910.7803
AQI 0.93091.00940.61160.57640.5920.48220.76690.82130.80681.0495
SGI 1.01981.0230.94160.94130.93920.98691.00510.93320.84680.711
DEPI 1.00250.91220.9411.00081.16161.18010.98210.82850.85860.7608
SGAI 1.2281.28340.85460.85920.74210.70311.15331.16281.20931.1782
LVGI 1.11681.09591.19081.27871.1251.19251.15111.17561.22181.2695
TATA -0.045-0.0461-0.0412-0.0329-0.0302-0.036-0.0914-0.1098-0.1101-0.1469
M-score -2.39-2.43-2.51-2.07-2.80-3.05-3.27-3.60-3.62-3.76
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