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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-3.46 (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 -3.46 suggests that the company is not a manipulator.

PBR' s 10-Year Beneish M-Score Range
Min: -3.46   Max: -1.13
Current: -3.46

-3.46
-1.13

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.13. The lowest was -3.46. And the median was -2.38.


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 * 0.4861+0.528 * 1.0547+0.404 * 0.5764+0.892 * 0.9768+0.115 * 0.423
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2576+4.679 * -0.0311-0.327 * 1.2787
=-3.46

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

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Accounts Receivable was $15,754 Mil.
Revenue was 34494 + 35593 + 33955 + 35569 = $139,611 Mil.
Gross Profit was 8229 + 7474 + 7248 + 9038 = $31,989 Mil.
Total Current Assets was $70,555 Mil.
Total Assets was $354,403 Mil.
Property, Plant and Equipment(Net PPE) was $240,793 Mil.
Depreciation, Depletion and Amortization(DDA) was $13,003 Mil.
Selling, General & Admin. Expense(SGA) was $9,735 Mil.
Total Current Liabilities was $37,006 Mil.
Long-Term Debt was $126,514 Mil.
Net Income was 2280 + 2760 + 1484 + 2996 = $9,520 Mil.
Non Operating Income was 347 + -2136 + -76 + -415 = $-2,280 Mil.
Cash Flow from Operations was 3981 + 4734 + 6274 + 7826 = $22,815 Mil.
Accounts Receivable was $33,178 Mil.
Revenue was 36345 + 35660 + 36261.916 + 34659 = $142,926 Mil.
Gross Profit was 9448 + 8046 + 8887.469 + 8157 = $34,538 Mil.
Total Current Assets was $116,893 Mil.
Total Assets was $695,313 Mil.
Property, Plant and Equipment(Net PPE) was $431,874 Mil.
Depreciation, Depletion and Amortization(DDA) was $9,568 Mil.
Selling, General & Admin. Expense(SGA) was $7,925 Mil.
Total Current Liabilities was $68,529 Mil.
Long-Term Debt was $182,370 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)
=(15754 / 139611) / (33178.487 / 142925.916)
=0.11284211 / 0.23213766
=0.4861

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)
=(7474 / 142925.916) / (8229 / 139611)
=0.24165295 / 0.22912951
=1.0547

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 - (70555 + 240793) / 354403) / (1 - (116893.309 + 431874.155) / 695313.138)
=0.12148599 / 0.21076212
=0.5764

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
=139611 / 142925.916
=0.9768

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))
=(9567.871 / (9567.871 + 431874.155)) / (13003 / (13003 + 240793))
=0.02167413 / 0.05123406
=0.423

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)
=(9735 / 139611) / (7924.875 / 142925.916)
=0.06972946 / 0.05544743
=1.2576

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)
=((126514 + 37006) / 354403) / ((182369.588 + 68529.092) / 695313.138)
=0.46139564 / 0.36084271
=1.2787

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
=(9520 - -2280 - 22815) / 354403
=-0.0311

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 -3.46 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

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
DSRI 0.90540.72120.64850.73970.79732.34981.19321.2151.07230.4861
GMI 1.11421.1181.11991.10451.21411.26631.17041.15051.11811.0547
AQI 0.86022.74192.88542.64870.90750.95590.93091.00940.64340.5764
SGI 1.27571.49171.36921.34171.1240.76350.78330.76450.8190.9768
DEPI 0.86480.55320.5990.61881.0582.931.011.04810.9410.423
SGAI 0.91770.90080.9310.9380.80660.78250.76650.95431.19621.2576
LVGI 1.13731.08561.15281.08751.08561.04781.11681.09591.17551.2787
TATA -0.0274-0.0397-0.0182-0.0384-0.0271-0.0103-0.0464-0.0447-0.0412-0.0311
M-score -2.49-1.78-1.82-1.93-2.60-1.13-2.65-2.64-2.95-3.46
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