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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-3.28 (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 -3.61 suggests that the company is not a manipulator.

PBR' s 10-Year Beneish M-Score Range
Min: -3.27   Max: -1.61
Current: -3.28

-3.27
-1.61

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.61. The lowest was -3.27. And the median was -2.48.


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 * 0.6306+0.528 * 0.9045+0.404 * 0.8213+0.892 * 0.9542+0.115 * 0.8149
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1047+4.679 * -0.1123-0.327 * 1.1752
=-3.61

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

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $9,479 Mil.
Revenue was 25967 + 31940.146 + 38844 + 36910 = $133,661 Mil.
Gross Profit was 7827 + 8268.607 + 8774 + 8651 = $33,521 Mil.
Total Current Assets was $42,881 Mil.
Total Assets was $259,335 Mil.
Property, Plant and Equipment(Net PPE) was $190,579 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,832 Mil.
Selling, General & Admin. Expense(SGA) was $10,998 Mil.
Total Current Liabilities was $28,167 Mil.
Long-Term Debt was $112,456 Mil.
Net Income was 1862 + -9990.685 + -2150 + 2225 = $-8,054 Mil.
Non Operating Income was -1183 + -526.577 + -7171 + 1824 = $-7,057 Mil.
Cash Flow from Operations was 5739 + 5624.08 + 10353 + 6413 = $28,129 Mil.
Accounts Receivable was $15,754 Mil.
Revenue was 34494 + 35593 + 34426.535 + 35569 = $140,083 Mil.
Gross Profit was 8106 + 7284 + 7348.315 + 9038 = $31,776 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 $13,049 Mil.
Selling, General & Admin. Expense(SGA) was $10,434 Mil.
Total Current Liabilities was $37,006 Mil.
Long-Term Debt was $126,514 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)
=(9479 / 133661.146) / (15754 / 140082.535)
=0.07091814 / 0.11246227
=0.6306

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)
=(8268.607 / 140082.535) / (7827 / 133661.146)
=0.22683995 / 0.25078797
=0.9045

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 - (42881 + 190579) / 259335) / (1 - (70555 + 240793) / 354403)
=0.09977442 / 0.12148599
=0.8213

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
=133661.146 / 140082.535
=0.9542

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))
=(13049.002 / (13049.002 + 240793)) / (12832.194 / (12832.194 + 190579))
=0.051406 / 0.06308499
=0.8149

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)
=(10998.198 / 133661.146) / (10433.991 / 140082.535)
=0.08228418 / 0.0744846
=1.1047

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)
=((112456 + 28167) / 259335) / ((126514 + 37006) / 354403)
=0.54224459 / 0.46139564
=1.1752

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
=(-8053.685 - -7056.577 - 28129.08) / 259335
=-0.1123

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 -3.61 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 0.98460.79450.85430.75041.57961.01931.67860.50741.34970.7923
GMI 0.95091.01791.02791.17260.82811.23871.13261.25091.10020.9694
AQI 0.83821.01461.4040.90060.94732.36270.86020.90750.65760.7716
SGI 1.46571.28451.21271.34790.77691.31111.21140.98760.98171.0155
DEPI 1.04491.01780.95110.94381.30421.06470.86481.0580.9410.9735
SGAI 1.05221.01641.02210.76131.34090.91690.93220.961.03851.142
LVGI 0.88950.86670.7571.27141.10060.75751.13731.08561.17171.1513
TATA -0.0321-0.0785-0.0578-0.0833-0.045-0.0329-0.0332-0.0391-0.0511-0.0339
M-score -2.29-2.72-2.45-2.79-2.52-1.56-1.86-3.05-2.57-3.00

Petroleo Brasileiro SA Petrobras Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 0.64190.82321.51811.56051.32751.820.91240.72650.80130.6306
GMI 1.30011.26621.15631.12551.08581.06531.10951.06040.98160.9045
AQI 0.90750.95590.93091.00940.65760.57640.5920.48220.75030.8213
SGI 0.92950.90850.93560.91460.99370.98010.98321.0271.00180.9542
DEPI 1.08011.04161.00311.03790.93131.00311.15771.14560.98530.8149
SGAI 0.77970.77450.76750.78441.29041.35811.39571.43421.12261.1047
LVGI 1.08561.04781.11681.09591.17171.27871.1251.19251.15481.1752
TATA -0.0388-0.0398-0.0433-0.0411-0.0531-0.0385-0.0449-0.0514-0.0914-0.1123
M-score -2.91-2.76-2.21-2.15-2.64-2.21-2.98-3.25-3.27-3.61
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