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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-2.68 (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 -2.70 suggests that the company is not a manipulator.

PBR' s 10-Year Beneish M-Score Range
Min: -3.24   Max: -1.61
Current: -2.68

-3.24
-1.61

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.61. The lowest was -3.24. 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 * 1.2728+0.528 * 1.042+0.404 * 0.4822+0.892 * 1.027+0.115 * 1.1456
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.4009+4.679 * -0.0417-0.327 * 1.1925
=-2.70

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $21,552 Mil.
Revenue was 38844 + 36910 + 34494 + 35593 = $145,841 Mil.
Gross Profit was 8774 + 8528 + 8229 + 7864 = $33,395 Mil.
Total Current Assets was $58,322 Mil.
Total Assets was $332,818 Mil.
Property, Plant and Equipment(Net PPE) was $241,373 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,859 Mil.
Selling, General & Admin. Expense(SGA) was $11,325 Mil.
Total Current Liabilities was $34,560 Mil.
Long-Term Debt was $123,811 Mil.
Net Income was -2150 + 2225 + 2280 + 2760 = $5,115 Mil.
Non Operating Income was -7171 + 587 + 347 + -258 = $-6,495 Mil.
Cash Flow from Operations was 10353 + 6413 + 3981 + 4734 = $25,481 Mil.
Accounts Receivable was $16,487 Mil.
Revenue was 34426.535 + 35569 + 36345 + 35660 = $142,001 Mil.
Gross Profit was 7348.315 + 9038 + 9448 + 8046 = $33,880 Mil.
Total Current Assets was $61,545 Mil.
Total Assets was $340,106 Mil.
Property, Plant and Equipment(Net PPE) was $208,362 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,816 Mil.
Selling, General & Admin. Expense(SGA) was $7,871 Mil.
Total Current Liabilities was $31,375 Mil.
Long-Term Debt was $104,340 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)
=(21552 / 145841) / (16487 / 142000.535)
=0.14777737 / 0.1161052
=1.2728

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)
=(8528 / 142000.535) / (8774 / 145841)
=0.23859287 / 0.22898225
=1.042

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 - (58322 + 241373) / 332818) / (1 - (61545 + 208362) / 340106)
=0.09952286 / 0.2064033
=0.4822

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
=145841 / 142000.535
=1.027

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))
=(12816.002 / (12816.002 + 208362)) / (12859 / (12859 + 241373))
=0.05794429 / 0.05057979
=1.1456

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)
=(11325 / 145841) / (7870.991 / 142000.535)
=0.07765306 / 0.05542931
=1.4009

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)
=((123811 + 34560) / 332818) / ((104340 + 31375) / 340106)
=0.47584866 / 0.39903736
=1.1925

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
=(5115 - -6495 - 25481) / 332818
=-0.0417

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 -2.70 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 0.95091.01791.02791.17260.82811.23871.13261.25091.0810.9866
AQI 0.83821.01461.4040.90060.94732.36270.86020.90750.64340.7669
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 1.05221.01641.02210.76131.34090.91690.93220.961.0111.1538
LVGI 0.88950.86670.7571.27141.10060.75751.13731.08561.17551.1511
TATA -0.0321-0.0785-0.0578-0.0833-0.045-0.0329-0.0332-0.0391-0.0412-0.0357
M-score -2.29-2.72-2.45-2.79-2.52-1.56-1.86-3.05-2.53-3.00

Petroleo Brasileiro SA Petrobras Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.91670.54540.82321.51811.56051.32751.820.91241.27280.7949
GMI 1.1741.30011.26621.15631.12551.06711.04221.08931.0420.9979
AQI 2.64870.90750.95590.93091.00940.64340.57640.5920.48220.7669
SGI 1.12510.92950.90850.93560.91460.99370.98010.98321.0271.0121
DEPI 0.63341.08011.04161.00311.03790.93131.00311.15771.14560.9767
SGAI 0.95080.77970.77450.76750.78441.25631.27161.36091.40091.1535
LVGI 1.08751.08561.04781.11681.09591.17551.27871.1251.19251.1511
TATA -0.0504-0.0388-0.0398-0.0433-0.0411-0.0433-0.0329-0.036-0.0417-0.0357
M-score -1.99-3.00-2.76-2.21-2.15-2.60-2.18-2.95-2.70-3.00
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