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GuruFocus has detected 2 Warning Signs with Petroleo Brasileiro SA Petrobras $PBR.
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Petroleo Brasileiro SA Petrobras (NYSE:PBR)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Petroleo Brasileiro SA Petrobras has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

PBR' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Petroleo Brasileiro SA Petrobras was 9. The lowest was 3. And the median was 5.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Net Income was 106 + -5380 + 754 + 1417 = $-3,103 Mil.
Cash Flow from Operations was 6251 + 8226 + 7209 + 7384 = $29,070 Mil.
Revenue was 20320 + 21693 + 21403 + 21737 = $85,153 Mil.
Gross Profit was 6502 + 7187 + 6926 + 7563 = $28,178 Mil.
Average Total Assets from the begining of this year (Mar16)
to the end of this year (Mar17) was
(241413 + 254951 + 247429 + 246983 + 248721) / 5 = $247899.4 Mil.
Total Assets at the begining of this year (Mar16) was $241,413 Mil.
Long-Term Debt was $104,087 Mil.
Total Current Assets was $42,311 Mil.
Total Current Liabilities was $24,767 Mil.
Net Income was 171 + -1062 + -9421 + -318 = $-10,630 Mil.

Revenue was 26021 + 23179 + 22147 + 17989 = $89,336 Mil.
Gross Profit was 8320 + 6695 + 6987 + 5373 = $27,375 Mil.
Average Total Assets from the begining of last year (Mar15)
to the end of last year (Mar16) was
(259335 + 275181.736 + 234479 + 230521 + 241413) / 5 = $248185.9472 Mil.
Total Assets at the begining of last year (Mar15) was $259,335 Mil.
Long-Term Debt was $108,991 Mil.
Total Current Assets was $41,094 Mil.
Total Current Liabilities was $30,193 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Petroleo Brasileiro SA Petrobras's current net income (TTM) was -3,103. ==> Negative ==> Score 0.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Petroleo Brasileiro SA Petrobras's current cash flow from operations (TTM) was 29,070. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Mar16)
=-3103/241413
=-0.01285349

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=-10630/259335
=-0.04098945

Petroleo Brasileiro SA Petrobras's return on assets of this year was -0.01285349. Petroleo Brasileiro SA Petrobras's return on assets of last year was -0.04098945. ==> This year is higher. ==> Score 1.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Petroleo Brasileiro SA Petrobras's current net income (TTM) was -3,103. Petroleo Brasileiro SA Petrobras's current cash flow from operations (TTM) was 29,070. ==> 29,070 > -3,103 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Mar17)=Long-Term Debt/Average Total Assets from Mar16 to Mar17
=104087/247899.4
=0.41987597

Gearing (Last Year: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=108991/248185.9472
=0.43915057

Petroleo Brasileiro SA Petrobras's gearing of this year was 0.41987597. Petroleo Brasileiro SA Petrobras's gearing of last year was 0.43915057. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Mar17)=Total Current Assets/Total Current Liabilities
=42311/24767
=1.70836193

Current Ratio (Last Year: Mar16)=Total Current Assets/Total Current Liabilities
=41094/30193
=1.36104395

Petroleo Brasileiro SA Petrobras's current ratio of this year was 1.70836193. Petroleo Brasileiro SA Petrobras's current ratio of last year was 1.36104395. ==> This year's current ratio is higher. ==> Score 1.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Petroleo Brasileiro SA Petrobras's number of shares in issue this year was 6522.2. Petroleo Brasileiro SA Petrobras's number of shares in issue last year was 6522.2. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=28178/85153
=0.33091024

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=27375/89336
=0.30642742

Petroleo Brasileiro SA Petrobras's gross margin of this year was 0.33091024. Petroleo Brasileiro SA Petrobras's gross margin of last year was 0.30642742. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Total Assets at the Beginning of This Year (Mar16)
=85153/241413
=0.35272748

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=89336/259335
=0.34448108

Petroleo Brasileiro SA Petrobras's asset turnover of this year was 0.35272748. Petroleo Brasileiro SA Petrobras's asset turnover of last year was 0.34448108. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+1+1+1+1+1+1+1
=8

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Petroleo Brasileiro SA Petrobras has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Petroleo Brasileiro SA Petrobras Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 1111111000
Question 2 1111111111
Question 3 0100000001
Question 4 1111111111
Question 5 1001100000
Question 6 0011000101
Question 7 1101011101
Question 8 0010000111
Question 9 0100000101
F-score 5656444637

Petroleo Brasileiro SA Petrobras Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Question 1 0000000000
Question 2 1111111111
Question 3 0000000011
Question 4 1111111111
Question 5 0100000001
Question 6 1000000111
Question 7 1001011011
Question 8 1111111111
Question 9 1000000111
F-score 6434344578
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