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AGCO Corp (NYSE:AGCO)
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 = 8 or 9
Bad or low score = 0 or 1

AGCO Corp has an F-score of 7 indicating the company's financial situation is typical for a stable company.

AGCO' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 7

3
8

During the past 13 years, the highest Piotroski F-Score of AGCO Corp was 8. 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 own currency.

This Year (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 99.6 + 139.3 + 126.2 + 213.7 = $579 Mil.
Cash Flow from Operations was -511 + 628 + 104 + 326.3 = $547 Mil.
Revenue was 2333.4 + 2859.7 + 2475.9 + 3048.2 = $10,717 Mil.
Gross Profit was 514.9 + 591 + 556.2 + 710.3 = $2,372 Mil.
Total Assets at the begining of this year (Mar13) was $7,992 Mil.
Total Assets was $8,320 Mil.
Long-Term Debt was $1,014 Mil.
Total Current Assets was $4,397 Mil.
Total Current Liabilities was $2,786 Mil.
Net Income was 118 + 102.5 + 94.5 + 204.9 = $520 Mil.

Revenue was 2403.1 + 2703.4 + 2295 + 2690.1 = $10,092 Mil.
Gross Profit was 533.1 + 527.8 + 491 + 611.4 = $2,163 Mil.
Total Assets at the begining of last year (Mar12) was $7,702 Mil.
Total Assets was $7,992 Mil.
Long-Term Debt was $1,155 Mil.
Total Current Assets was $4,272 Mil.
Total Current Liabilities was $2,581 Mil.

Profitability

Q1. 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.

AGCO Corp's current net income was 579. ==> Positive ==> Score 1.

Q2. 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.

AGCO Corp's current cash flow from operations was 547. ==> Positive ==> Score 1.

Q3. 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/Total Assets at the beginning of this year (Mar13)
=578.8/7991.5
=0.07242695

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=519.9/7701.8
=0.0675037

AGCO Corp's return on assets of this year was 0.07242695. AGCO Corp's return on assets of last year was 0.0675037. ==> This year is higher. ==> Score 1.

Q4. 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.

AGCO Corp's current net income was 579. AGCO Corp's current cash flow from operations was 547. ==> 547 =< 579 ==> CFROA =< ROA ==> Score 0.

Funding

Q5. 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)=Long-Term Debt/Total Assets
=1014.3/8319.7
=0.12191545

Gearing (Last Year)=Long-Term Debt/Total Assets
=1155.1/7991.5
=0.14454107

AGCO Corp's gearing of this year was 0.12191545. AGCO Corp's gearing of last year was 0.14454107. ==> This year is lower or equal to last year. ==> Score 1.

Q6. 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)=Total Current Assets/Total Current Liabilities
=4396.9/2786.3
=1.57804257

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=4272.3/2580.8
=1.65541692

AGCO Corp's current ratio of this year was 1.57804257. AGCO Corp's current ratio of last year was 1.65541692. ==> Last year's current ratio is higher ==> Score 0.

Q7. 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.

AGCO Corp's number of shares in issue this year was 96.6. AGCO Corp's number of shares in issue last year was 99.1. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Q8. 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)=Gross Profit/Revenue
=2372.4/10717.2
=0.22136379

Gross Margin (Last Year)=Gross Profit/Revenue
=2163.3/10091.6
=0.2143664

AGCO Corp's gross margin of this year was 0.22136379. AGCO Corp's gross margin of last year was 0.2143664. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Mar13)
=10717.2/7991.5
=1.34107489

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=10091.6/7701.8
=1.3102911

AGCO Corp's asset turnover of this year was 1.34107489. AGCO Corp's asset turnover of last year was 1.3102911. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+0+1+0+1+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

AGCO Corp has an F-score of 7 indicating the company's financial situation is typical for a stable company.


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 own currency.

AGCO Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1101111111
Q2 1111111111
Q3 1001101101
Q4 1111011111
Q5 0111011011
Q6 0000110101
Q7 0100010000
Q8 1001101111
Q9 1011101101
F-score 6547667758

AGCO Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 1111000011
Q4 1000111110
Q5 0000111111
Q6 1111010010
Q7 0010110001
Q8 1111111111
Q9 1101000011
F-score 7666675587
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