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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-2.88 (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 -3.19 suggests that the company is not a manipulator.

PBR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.16   Max: -1.61
Current: -2.88

-3.16
-1.61

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.61. The lowest was -3.16. 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 * 1.1173+0.528 * 0.775+0.404 * 1.1476+0.892 * 0.6512+0.115 * 0.8313
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0288+4.679 * -0.0776-0.327 * 1.199
=-3.19

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

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $8,551 Mil.
Revenue was 22147 + 23179 + 25600.93 + 22979.522 = $93,906 Mil.
Gross Profit was 6987 + 6695 + 8185.97 + 6926.03 = $28,794 Mil.
Total Current Assets was $43,428 Mil.
Total Assets was $230,521 Mil.
Property, Plant and Equipment(Net PPE) was $161,297 Mil.
Depreciation, Depletion and Amortization(DDA) was $11,496 Mil.
Selling, General & Admin. Expense(SGA) was $7,765 Mil.
Total Current Liabilities was $28,573 Mil.
Long-Term Debt was $111,521 Mil.
Net Income was -9421 + -1062 + 170.047 + 1647.289 = $-8,666 Mil.
Non Operating Income was -14374 + -1426 + -307.43 + -873.712 = $-16,981 Mil.
Cash Flow from Operations was 6577 + 6745.132 + 7330.289 + 5558.749 = $26,211 Mil.
Accounts Receivable was $11,752 Mil.
Revenue was 31940.146 + 38844 + 37429.959 + 35985.049 = $144,199 Mil.
Gross Profit was 8268.607 + 8985 + 8558.616 + 8456.453 = $34,269 Mil.
Total Current Assets was $50,713 Mil.
Total Assets was $297,983 Mil.
Property, Plant and Equipment(Net PPE) was $218,214 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,775 Mil.
Selling, General & Admin. Expense(SGA) was $11,590 Mil.
Total Current Liabilities was $31,046 Mil.
Long-Term Debt was $119,990 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)
=(8551 / 93906.452) / (11752.201 / 144199.154)
=0.09105871 / 0.08149979
=1.1173

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)
=(6695 / 144199.154) / (6987 / 93906.452)
=0.23764825 / 0.3066243
=0.775

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 - (43428 + 161297) / 230521) / (1 - (50713.245 + 218213.846) / 297983.459)
=0.11190304 / 0.09751
=1.1476

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
=93906.452 / 144199.154
=0.6512

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))
=(12774.896 / (12774.896 + 218213.846)) / (11495.791 / (11495.791 + 161297))
=0.05530528 / 0.06652934
=0.8313

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)
=(7764.966 / 93906.452) / (11589.563 / 144199.154)
=0.08268831 / 0.08037192
=1.0288

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)
=((111521 + 28573) / 230521) / ((119989.634 + 31045.867) / 297983.459)
=0.60772771 / 0.50685867
=1.199

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
=(-8665.664 - -16981.142 - 26211.17) / 230521
=-0.0776

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 -3.19 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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.79450.85430.75041.57961.02270.89190.9561.34380.79231.0716
GMI 1.04421.0021.12680.82741.17551.24321.25091.0810.98660.7762
AQI 1.01461.4040.90060.94732.36270.89470.91780.62510.75031.1476
SGI 1.28451.21271.34790.77691.30681.21540.98760.98171.01550.6774
DEPI 1.01780.95110.94381.30421.0410.88241.06050.9410.97350.8382
SGAI 1.05620.98360.84741.20460.9620.88851.14290.84921.17311
LVGI 0.77370.84791.27141.08840.7661.12671.08181.18691.15481.199
TATA -0.0742-0.0578-0.0815-0.045-0.0322-0.0329-0.0386-0.0411-0.0364-0.0571
M-score -2.67-2.48-2.82-2.50-1.61-2.49-2.66-2.52-3.02-3.11

Petroleo Brasileiro SA Petrobras Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.39081.39631.87950.93870.74810.79010.64380.80.9141.1173
GMI 0.93681.09421.0741.12451.06970.98190.90940.81370.77620.775
AQI 1.00940.62510.57640.5920.48220.75030.82130.80681.04951.1476
SGI 1.02630.94470.94910.95570.99731.0160.92670.83220.70140.6512
DEPI 0.90920.93790.99371.14291.19250.99230.85140.89210.75540.8313
SGAI 1.12240.85480.85920.84790.94681.14981.16251.26381.00041.0288
LVGI 1.09591.18691.27871.1251.19251.15481.17561.22181.26951.199
TATA -0.0425-0.0405-0.0308-0.0311-0.041-0.0936-0.112-0.1158-0.1337-0.0776
M-score -2.39-2.50-2.06-2.82-3.11-3.28-3.62-3.66-3.67-3.19
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