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GuruFocus has detected 6 Warning Signs with Pampa Energia SA $PAM.
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Pampa Energia SA (NYSE:PAM)
Beneish M-Score
0.03 (As of Today)

Warning Sign:

Beneish M-Score 0.03 higher than -2.22, which implies that it might have manipulated its financial results.

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.

Pampa Energia SA has a M-score of -0.77 signals that the company is a manipulator.

PAM' s Beneish M-Score Range Over the Past 10 Years
Min: -5.67   Max: 1.27
Current: 0.03

-5.67
1.27

During the past 13 years, the highest Beneish M-Score of Pampa Energia SA was 1.27. The lowest was -5.67. And the median was -2.62.


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 Pampa Energia SA 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 * 0.7492+0.528 * 0.3246+0.404 * 0.927+0.892 * 3.331+0.115 * 2.2459
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.728+4.679 * 0.0218-0.327 * 1.1258
=-0.77

* 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:
Accounts Receivable was $631 Mil.
Revenue was 956.694527677 + 820.999842296 + 663.520807146 + 297.253666559 = $2,738 Mil.
Gross Profit was 294.90616622 + 214.452609998 + 114.754889637 + 7.1260317617 = $631 Mil.
Total Current Assets was $1,880 Mil.
Total Assets was $5,404 Mil.
Property, Plant and Equipment(Net PPE) was $2,660 Mil.
Depreciation, Depletion and Amortization(DDA) was $78 Mil.
Selling, General & Admin. Expense(SGA) was $529 Mil.
Total Current Liabilities was $1,593 Mil.
Long-Term Debt was $1,668 Mil.
Net Income was 119.917994007 + 61.9410187668 + -62.484723549 + -47.8442716705 = $72 Mil.
Non Operating Income was 39.4259580508 + -22.9911370446 + -5.22761325356 + -12.085140414 = $-1 Mil.
Cash Flow from Operations was -45.3556221416 + 0 + 0 + 0 = $-45 Mil.
Accounts Receivable was $253 Mil.
Revenue was 289.441248973 + 138.352545778 + 202.068004637 + 192.255543939 = $822 Mil.
Gross Profit was 64.9137222679 + -6.46024878313 + 3.57806068728 + -0.509547130358 = $62 Mil.
Total Current Assets was $723 Mil.
Total Assets was $2,160 Mil.
Property, Plant and Equipment(Net PPE) was $1,064 Mil.
Depreciation, Depletion and Amortization(DDA) was $72 Mil.
Selling, General & Admin. Expense(SGA) was $218 Mil.
Total Current Liabilities was $657 Mil.
Long-Term Debt was $501 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)
=(631.19381801 / 2738.46884368) / (252.930224596 / 822.117343326)
=0.23049151 / 0.30765708
=0.7492

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)
=(61.5219870417 / 822.117343326) / (631.239697617 / 2738.46884368)
=0.07483358 / 0.23050826
=0.3246

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 - (1880.20816906 + 2659.51742627) / 5404.25800347) / (1 - (722.649000274 + 1064.19864421) / 2159.53095042)
=0.15997245 / 0.17257604
=0.927

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
=2738.46884368 / 822.117343326
=3.331

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))
=(72.3599724542 / (72.3599724542 + 1064.19864421)) / (77.5902854439 / (77.5902854439 + 2659.51742627))
=0.06366585 / 0.02834755
=2.2459

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)
=(528.70327785 / 2738.46884368) / (218.024210323 / 822.117343326)
=0.19306529 / 0.26519841
=0.728

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)
=((1668.19113704 + 1593.18719445) / 5404.25800347) / ((500.646740619 + 656.931936456) / 2159.53095042)
=0.60348309 / 0.53603246
=1.1258

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
=(71.5300175545 - -0.877932661421 - -45.3556221416) / 5404.25800347
=0.0218

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.

Pampa Energia SA has a M-score of -0.77 signals that the company is likely to 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 local exchange's currency.

Pampa Energia SA Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.45670.81071.05621.3480.9241.4431.22570.83890.9716
GMI 1.10131.0451.21951.85461.9628-0.9654-1.75392.0180.075
AQI 1.08390.77041.04442.05530.78030.59691.15020.8810.9936
SGI 2.66610.85891.14441.01871.14620.66070.77490.97862.865
DEPI 0.46821.16950.90840.9240.98431.07091.41530.70438.2296
SGAI 0.88651.14851.06040.99980.96991.8391.18651.18490.7086
LVGI 1.11490.93571.09661.15431.15641.25151.00430.92611.0516
TATA -0.0655-0.0945-0.0599-0.0913-0.1557-0.072-0.1127-0.1352-0.0012
M-score -1.79-3.28-2.50-1.75-2.78-4.13-4.38-2.83-0.47

Pampa Energia SA Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
DSRI 1.22571.14881.08681.04760.83890.921.14651.15540.97160.7492
GMI -1.7539-0.5919-0.02740.46812.0180.38080.38040.19570.0750.3246
AQI 1.15021.14481.0730.94410.8810.8740.91881.26880.99360.927
SGI 0.77490.87010.91260.99120.97861.09841.22421.81082.8653.331
DEPI 1.41531.60221.36870.91340.70430.64110.96193.52928.22962.2459
SGAI 1.18651.20151.29241.23021.18490.99550.90980.83950.70860.728
LVGI 1.00430.86850.8820.92250.92610.95041.00010.97551.05161.1258
TATA -0.1127-0.0882-0.1032-0.083-0.1352-0.1186-0.0903-0.0269-0.00120.0218
M-score -4.38-3.58-3.44-3.16-2.83-3.42-2.92-1.73-0.47-0.77
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