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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-3.00 (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 -2.73 suggests that the company is not a manipulator.

PBR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.29   Max: -1.63
Current: -3

-3.29
-1.63

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.63. The lowest was -3.29. And the median was -2.51.


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 * 1.307+0.528 * 0.916+0.404 * 1.0139+0.892 * 0.767+0.115 * 0.9391
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2428+4.679 * -0.0562-0.327 * 0.9148
=-2.73

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $7,905 Mil.
Revenue was 21693 + 20320 + 17989 + 22147 = $82,149 Mil.
Gross Profit was 7187 + 6502 + 5373 + 6987 = $26,049 Mil.
Total Current Assets was $44,591 Mil.
Total Assets was $247,429 Mil.
Property, Plant and Equipment(Net PPE) was $176,633 Mil.
Depreciation, Depletion and Amortization(DDA) was $13,566 Mil.
Selling, General & Admin. Expense(SGA) was $7,864 Mil.
Total Current Liabilities was $25,514 Mil.
Long-Term Debt was $111,227 Mil.
Net Income was -5380 + 106 + -318 + -9421 = $-15,013 Mil.
Non Operating Income was -8415 + -1937 + -1862 + -14374 = $-26,588 Mil.
Cash Flow from Operations was 8226 + 6251 + 4428 + 6577 = $25,482 Mil.
Accounts Receivable was $7,886 Mil.
Revenue was 23179 + 26021 + 25967 + 31940.146 = $107,107 Mil.
Gross Profit was 6695 + 8320 + 7827 + 8268.607 = $31,111 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 $11,888 Mil.
Selling, General & Admin. Expense(SGA) was $8,250 Mil.
Total Current Liabilities was $27,616 Mil.
Long-Term Debt was $114,035 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)
=(7905 / 82149) / (7886 / 107107.146)
=0.09622759 / 0.07362721
=1.307

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)
=(31110.607 / 107107.146) / (26049 / 82149)
=0.29046248 / 0.31709455
=0.916

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 - (44591 + 176633) / 247429) / (1 - (44397 + 165590) / 234479)
=0.10590917 / 0.10445285
=1.0139

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
=82149 / 107107.146
=0.767

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))
=(11888.194 / (11888.194 + 165590)) / (13566 / (13566 + 176633))
=0.06698397 / 0.0713253
=0.9391

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)
=(7864 / 82149) / (8250.198 / 107107.146)
=0.09572849 / 0.07702752
=1.2428

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)
=((111227 + 25514) / 247429) / ((114035 + 27616) / 234479)
=0.55264743 / 0.60410954
=0.9148

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
=(-15013 - -26588 - 25482) / 247429
=-0.0562

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 -2.73 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 local exchange's currency.

Petroleo Brasileiro SA Petrobras Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.79450.85430.75041.57961.01931.41610.90740.89460.79231.0716
GMI 1.05821.02791.12680.86181.23871.13261.27681.07790.96940.7762
AQI 1.01461.4040.90060.94732.36270.86020.90750.65760.75031.1476
SGI 1.28451.21271.34790.77691.31111.21140.98760.98171.01550.6774
DEPI 1.02040.95110.94381.31451.05640.86481.0580.9410.97350.8382
SGAI 1.01641.02210.84741.20461.03830.82331.0290.94321.15381.0168
LVGI 0.77370.84791.27141.10060.75751.13731.08561.17171.15481.199
TATA -0.0785-0.0578-0.0815-0.0501-0.0329-0.0332-0.0371-0.0385-0.0357-0.0571
M-score -2.67-2.48-2.82-2.51-1.58-2.08-2.67-2.92-3.02-3.11

Petroleo Brasileiro SA Petrobras Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.89270.71130.78410.61620.78380.89151.08641.33781.25451.307
GMI 1.09211.03630.98190.90590.81140.77530.77520.81720.89030.916
AQI 0.5920.48220.75030.82130.80681.04951.14760.97171.05911.0139
SGI 1.00491.0491.02370.97640.84940.71910.66970.65320.68120.767
DEPI 1.15371.16511.0020.82860.85680.74250.8170.98810.93340.9391
SGAI 1.20641.33531.19761.11631.1940.95390.97941.11481.08161.2428
LVGI 1.1251.19251.15481.17521.22141.26951.1991.06320.99130.9148
TATA -0.0369-0.0474-0.1007-0.1208-0.1089-0.1148-0.0584-0.0588-0.0492-0.0562
M-score -2.92-3.22-3.32-3.64-3.62-3.58-3.11-2.90-2.81-2.73
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