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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Beneish M-Score
-2.89 (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 -2.85 suggests that the company is not a manipulator.

PBR' s Beneish M-Score Range Over the Past 10 Years
Min: -3.28   Max: -1.63
Current: -2.89

-3.28
-1.63

During the past 13 years, the highest Beneish M-Score of Petroleo Brasileiro SA Petrobras was -1.63. The lowest was -3.28. 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 * 1.2545+0.528 * 0.8903+0.404 * 1.0591+0.892 * 0.6812+0.115 * 0.9299
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0816+4.679 * -0.0569-0.327 * 0.9909
=-2.85

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

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Accounts Receivable was $8,204 Mil.
Revenue was 20320 + 17989 + 22147 + 23179 = $83,635 Mil.
Gross Profit was 6502 + 5373 + 6987 + 6695 = $25,557 Mil.
Total Current Assets was $41,321 Mil.
Total Assets was $254,951 Mil.
Property, Plant and Equipment(Net PPE) was $187,291 Mil.
Depreciation, Depletion and Amortization(DDA) was $12,317 Mil.
Selling, General & Admin. Expense(SGA) was $7,763 Mil.
Total Current Liabilities was $26,071 Mil.
Long-Term Debt was $112,546 Mil.
Net Income was 106 + -318 + -9421 + -1062 = $-10,695 Mil.
Non Operating Income was -1937 + -1862 + -14374 + -1426 = $-19,599 Mil.
Cash Flow from Operations was 6251 + 4428 + 6577 + 6147 = $23,403 Mil.
Accounts Receivable was $9,600 Mil.
Revenue was 26021 + 25967 + 31940.146 + 38844 = $122,772 Mil.
Gross Profit was 8320 + 7827 + 8268.607 + 8985 = $33,401 Mil.
Total Current Assets was $51,360 Mil.
Total Assets was $275,182 Mil.
Property, Plant and Equipment(Net PPE) was $196,978 Mil.
Depreciation, Depletion and Amortization(DDA) was $11,990 Mil.
Selling, General & Admin. Expense(SGA) was $10,536 Mil.
Total Current Liabilities was $32,215 Mil.
Long-Term Debt was $118,775 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)
=(8204 / 83635) / (9599.828 / 122772.146)
=0.0980929 / 0.07819223
=1.2545

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)
=(33400.607 / 122772.146) / (25557 / 83635)
=0.27205362 / 0.30557781
=0.8903

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 - (41321 + 187291) / 254951) / (1 - (51360.058 + 196978.217) / 275181.736)
=0.10331005 / 0.09754812
=1.0591

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
=83635 / 122772.146
=0.6812

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))
=(11990.121 / (11990.121 + 196978.217)) / (12317 / (12317 + 187291))
=0.05737769 / 0.06170594
=0.9299

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)
=(7763 / 83635) / (10536.198 / 122772.146)
=0.09281999 / 0.08581912
=1.0816

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)
=((112546 + 26071) / 254951) / ((118775.019 + 32214.842) / 275181.736)
=0.54370055 / 0.54869143
=0.9909

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
=(-10695 - -19599 - 23403) / 254951
=-0.0569

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 -2.85 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 0.79450.85430.75041.57961.01931.41610.90740.89460.79231.0716
GMI 1.05821.02791.12680.86181.23871.13261.27681.07790.96940.7762
AQI 1.01461.4040.90060.94732.36270.86020.90750.65760.75031.1476
SGI 1.28451.21271.34790.77691.31111.21140.98760.98171.01550.6774
DEPI 1.02040.95110.94381.31451.05640.86481.0580.9410.97350.8382
SGAI 1.01641.02210.84741.20461.03830.82331.0290.94321.15381.0168
LVGI 0.77370.84791.27141.10060.75751.13731.08561.17171.15481.199
TATA -0.0785-0.0578-0.0815-0.0501-0.0329-0.0332-0.0371-0.0385-0.0357-0.0571
M-score -2.67-2.48-2.82-2.51-1.58-2.08-2.67-2.92-3.02-3.11

Petroleo Brasileiro SA Petrobras Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
DSRI 1.820.90910.72390.79830.62820.76970.8761.0671.31251.2545
GMI 1.04241.09341.03710.98170.90480.81050.77470.77540.81810.8903
AQI 0.57640.5920.48220.75030.82130.80681.04951.14760.97171.0591
SGI 0.98010.98681.03071.00550.95790.86490.73180.68190.66580.6812
DEPI 1.00311.15371.16511.0020.82860.860.74530.82010.99190.9299
SGAI 1.21231.1961.32811.19191.10971.20430.95910.9841.12131.0816
LVGI 1.27871.1251.19251.15481.17521.22181.26951.1991.06320.9909
TATA -0.027-0.0275-0.0371-0.0891-0.1076-0.1085-0.1226-0.0663-0.0664-0.0569
M-score -2.15-2.88-3.17-3.27-3.58-3.62-3.62-3.15-2.95-2.85
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