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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-2.91 (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 -2.90 suggests that the company is not a manipulator.

PBR' s 10-Year Beneish M-Score Range
Min: -3.29   Max: -1.65
Current: -2.91

-3.29
-1.65

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.65. The lowest was -3.29. And the median was -2.46.


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 * 0.9154+0.528 * 1.1026+0.404 * 0.592+0.892 * 0.9799+0.115 * 1.1616
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2436+4.679 * -0.0327-0.327 * 1.125
=-2.90

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

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $14,419 Mil.
Revenue was 36910 + 34494 + 35593 + 33955 = $140,952 Mil.
Gross Profit was 8528 + 8229 + 7474 + 7248 = $31,479 Mil.
Total Current Assets was $65,502 Mil.
Total Assets was $363,392 Mil.
Property, Plant and Equipment(Net PPE) was $253,955 Mil.
Depreciation, Depletion and Amortization(DDA) was $13,087 Mil.
Selling, General & Admin. Expense(SGA) was $9,571 Mil.
Total Current Liabilities was $34,167 Mil.
Long-Term Debt was $129,025 Mil.
Net Income was 2225 + 2280 + 2760 + 1484 = $8,749 Mil.
Non Operating Income was 587 + 347 + -2136 + 421 = $-781 Mil.
Cash Flow from Operations was 6413 + 3981 + 4734 + 6274 = $21,402 Mil.
Accounts Receivable was $16,073 Mil.
Revenue was 35569 + 36345 + 35660 + 36261.916 = $143,836 Mil.
Gross Profit was 9038 + 9448 + 8046 + 8887.469 = $35,419 Mil.
Total Current Assets was $65,313 Mil.
Total Assets was $338,068 Mil.
Property, Plant and Equipment(Net PPE) was $203,716 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,297 Mil.
Selling, General & Admin. Expense(SGA) was $7,854 Mil.
Total Current Liabilities was $30,765 Mil.
Long-Term Debt was $104,189 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)
=(14419 / 140952) / (16073 / 143835.916)
=0.10229724 / 0.11174539
=0.9154

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)
=(8229 / 143835.916) / (8528 / 140952)
=0.24624913 / 0.22333135
=1.1026

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 - (65502 + 253955) / 363392) / (1 - (65313 + 203716) / 338068)
=0.1209025 / 0.20421631
=0.592

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
=140952 / 143835.916
=0.9799

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))
=(12297 / (12297 + 203716)) / (13087 / (13087 + 253955))
=0.05692713 / 0.04900727
=1.1616

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)
=(9571 / 140952) / (7853.875 / 143835.916)
=0.06790255 / 0.05460302
=1.2436

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)
=((129025 + 34167) / 363392) / ((104189 + 30765) / 338068)
=0.44907978 / 0.39919188
=1.125

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
=(8749 - -781 - 21402) / 363392
=-0.0327

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 -2.90 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 1.59510.97970.83810.92850.73211.56841.01910.95350.90740.8946
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 1.24311.46571.28451.21271.34790.77691.31111.21140.98760.9817
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 -1.68-2.29-2.68-2.38-2.80-2.51-1.58-2.52-2.68-2.95

Petroleo Brasileiro SA Petrobras Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.85820.77460.8820.9640.97820.99911.01890.88680.98130.9154
GMI 1.11811.13351.12951.25781.26621.15631.12511.07931.05471.1026
AQI 2.74192.88542.64870.90750.95590.93091.00940.64340.57640.592
SGI 1.25361.14641.12520.92950.90850.93560.91160.99040.97680.9799
DEPI 0.65410.5990.61881.0581.03461.011.04810.9411.01321.1616
SGAI 0.90560.93710.94310.77650.77830.76150.85961.12911.14091.2436
LVGI 1.08561.15281.08751.08561.04781.11681.09591.17551.27871.125
TATA -0.0316-0.0314-0.0513-0.0396-0.0406-0.0433-0.0431-0.0395-0.0295-0.0327
M-score -1.82-1.96-2.05-2.65-2.62-2.68-2.67-2.97-2.91-2.90
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