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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-2.82 (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 -2.80 suggests that the company is not a manipulator.

PBR' s 10-Year Beneish M-Score Range
Min: -3.29   Max: -1.51
Current: -2.82

-3.29
-1.51

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.51. The lowest was -3.29. And the median was -2.45.


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 * 0.9552+0.528 * 1.111+0.404 * 0.592+0.892 * 0.9392+0.115 * 1.1616
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.7421+4.679 * -0.0302-0.327 * 1.125
=-2.80

* 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 $9,277 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 + -481 = $-1,683 Mil.
Cash Flow from Operations was 6413 + 3981 + 4734 + 6274 = $21,402 Mil.
Accounts Receivable was $16,073 Mil.
Revenue was 35984.424 + 35929.576 + 41904.474 + 36261.916 = $150,080 Mil.
Gross Profit was 9145.86 + 9340.14 + 9863.84 + 8887.469 = $37,237 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 $13,310 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 / 150080.39)
=0.10229724 / 0.10709594
=0.9552

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 / 150080.39) / (8528 / 140952)
=0.24811575 / 0.22333135
=1.111

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 / 150080.39
=0.9392

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)
=(9277 / 140952) / (13309.818 / 150080.39)
=0.06581673 / 0.08868459
=0.7421

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 - -1683 - 21402) / 363392
=-0.0302

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 -2.80 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 1.21290.95960.79450.85430.75041.57960.99690.91490.9561.3438
GMI 1.13120.97571.04421.0411.08450.86181.12861.24321.25091.081
AQI 1.14930.83751.01541.38330.91410.94730.79372.66340.91780.6116
SGI 1.21611.50391.28451.21271.34790.77691.30681.21540.98760.9817
DEPI 0.88131.05121.01780.95370.94121.30421.33840.68631.06050.941
SGAI 1.14081.02551.05621.27370.65441.09270.97860.9631.14290.8492
LVGI 0.89390.88950.86670.85051.01761.21030.771.12081.08181.1908
TATA -0.0307-0.0321-0.074-0.0608-0.0815-0.0453-0.0324-0.0329-0.0386-0.0412
M-score -2.11-2.26-2.70-2.54-2.72-2.50-2.26-1.79-2.66-2.53

Petroleo Brasileiro SA Petrobras Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.8890.84291.01230.9170.75771.39261.39521.40091.8950.9552
GMI 1.29671.46281.64871.24331.21761.04470.93641.08771.06311.111
AQI 2.74192.88542.64870.91780.95590.93091.00940.61160.57640.592
SGI 1.20471.10081.01881.02960.9871.01981.0230.94160.94130.9392
DEPI 0.68470.62250.76851.06051.03831.00250.91220.9411.00081.1616
SGAI 0.98741.03851.10571.13561.13651.2281.28340.85460.85920.7421
LVGI 1.08561.15281.08751.08181.04781.11681.09591.19081.27871.125
TATA -0.0321-0.0309-0.0376-0.0363-0.0354-0.045-0.0461-0.0412-0.0329-0.0302
M-score -1.75-1.77-1.69-2.65-2.82-2.39-2.43-2.51-2.07-2.80
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