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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-3.29 (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 -3.63 suggests that the company is not a manipulator.

PBR' s 10-Year Beneish M-Score Range
Min: -3.29   Max: -1.6
Current: -3.29

-3.29
-1.6

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.60. 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 * 0.7863+0.528 * 0.8214+0.404 * 0.8068+0.892 * 0.8641+0.115 * 0.8634
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.2201+4.679 * -0.1147-0.327 * 1.2218
=-3.63

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

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $9,634 Mil.
Revenue was 25691.1013272 + 23668.7464188 + 32188.9549188 + 45533.1802045 = $127,082 Mil.
Gross Profit was 8214.80219816 + 7133.76201694 + 8333.01790378 + 10527.9751059 = $34,210 Mil.
Total Current Assets was $51,541 Mil.
Total Assets was $276,151 Mil.
Property, Plant and Equipment(Net PPE) was $197,672 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,630 Mil.
Selling, General & Admin. Expense(SGA) was $10,907 Mil.
Total Current Liabilities was $32,328 Mil.
Long-Term Debt was $119,193 Mil.
Net Income was 170.646270527 + 1696.69574075 + -10068.5112987 + -1958.27323667 = $-10,159 Mil.
Non Operating Income was -308.513031462 + -899.917234354 + -530.678678224 + -7106.05800077 = $-8,845 Mil.
Cash Flow from Operations was 7356.10759392 + 5725.47271917 + 5667.89053333 + 11613.5933958 = $30,363 Mil.
Accounts Receivable was $14,179 Mil.
Revenue was 36805.9033989 + 35073.1182796 + 40871.1678739 + 34319.7879859 = $147,070 Mil.
Gross Profit was 8415.92128801 + 8242.15053763 + 8536.89816787 + 7325.53003534 = $32,521 Mil.
Total Current Assets was $64,410 Mil.
Total Assets was $357,333 Mil.
Property, Plant and Equipment(Net PPE) was $249,721 Mil.
Depreciation, Depletion and Amortization(DDA) was $13,656 Mil.
Selling, General & Admin. Expense(SGA) was $10,346 Mil.
Total Current Liabilities was $33,597 Mil.
Long-Term Debt was $126,874 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)
=(9633.64077514 / 127081.982869) / (14178.5974955 / 147069.977538)
=0.0758065 / 0.09640715
=0.7863

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)
=(7133.76201694 / 147069.977538) / (8214.80219816 / 127081.982869)
=0.22112263 / 0.26919282
=0.8214

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 - (51540.9583186 + 197672.012083) / 276150.978565) / (1 - (64409.9092129 + 249720.902504) / 357333.299642)
=0.09754812 / 0.1209025
=0.8068

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
=127081.982869 / 147069.977538
=0.8641

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))
=(13656.2594199 / (13656.2594199 + 249720.902504)) / (12630.0727442 / (12630.0727442 + 197672.012083))
=0.05185058 / 0.06005681
=0.8634

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)
=(10907.457181 / 127081.982869) / (10346.0848138 / 147069.977538)
=0.08583008 / 0.07034804
=1.2201

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)
=((119193.36697 + 32328.3092843) / 276150.978565) / ((126873.813953 + 33597.3461538) / 357333.299642)
=0.54869143 / 0.44907978
=1.2218

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
=(-10159.4425241 - -8845.16694481 - 30363.0642422) / 276150.978565
=-0.1147

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 -3.63 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 0.95960.79450.85430.75041.57961.02270.89190.9561.34380.7923
GMI 0.97571.04421.0411.08450.86181.12861.24321.25091.0810.9866
AQI 0.83821.01461.4040.90060.94732.36270.86020.90750.65760.7716
SGI 1.57371.24571.21841.30620.80071.30791.23430.96331.00241.0147
DEPI 1.05121.01780.95110.94381.30421.0410.88451.0580.9410.9735
SGAI 1.02551.05621.27370.65441.09271.06050.88851.14290.84921.1731
LVGI 0.88950.86670.7571.27141.10060.75751.13731.08561.17171.1513
TATA -0.0321-0.074-0.0608-0.0815-0.0453-0.0322-0.0332-0.0391-0.0411-0.0339
M-score -2.20-2.73-2.49-2.85-2.44-1.64-2.49-2.69-2.49-3.00

Petroleo Brasileiro SA Petrobras Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.84331.59151.55721.30241.67520.86110.71170.79480.66760.7863
GMI 1.26581.15991.12831.08611.06421.11481.05880.98420.91310.8214
AQI 0.95590.93091.00940.65760.57640.5920.48220.75030.82130.8068
SGI 0.8880.92380.91021.03421.01991.01011.10291.00910.94440.8641
DEPI 1.11711.09731.04070.92030.93331.10211.12040.97860.86560.8634
SGAI 0.77890.77380.79021.28121.29731.2781.41511.12121.12891.2201
LVGI 1.04781.11681.09591.17171.27871.1251.19251.15481.17561.2218
TATA -0.04-0.0439-0.0418-0.0548-0.045-0.0443-0.0509-0.0914-0.1076-0.1147
M-score -2.75-2.14-2.16-2.63-2.34-2.99-3.19-3.27-3.55-3.63
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