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AK Steel Holding Corp (NYSE:AKS)
Piotroski F-Score
2 (As of Today)

Warning Sign:

Piotroski F-Score of 2 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

AK Steel Holding Corp has an F-score of 2. It is a bad or low score, which usually implies poor business operation.

AKS' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 2

1
8

During the past 13 years, the highest Piotroski F-Score of AK Steel Holding Corp was 8. The lowest was 1. 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 -86.1 + 35.2 + -31.7 + -40.4 = $-123 Mil.
Cash Flow from Operations was -125 + 113.5 + -119.2 + -97.5 = $-228 Mil.
Revenue was 1383.5 + 1464.8 + 1331.3 + 1404.5 = $5,584 Mil.
Gross Profit was 47.9 + 140.9 + 108.9 + 95.3 = $393 Mil.
Total Assets at the begining of this year (Mar13) was $3,906 Mil.
Total Assets was $3,615 Mil.
Long-Term Debt was $1,657 Mil.
Total Current Assets was $1,326 Mil.
Total Current Liabilities was $867 Mil.
Net Income was -9.9 + -230.4 + -60.9 + -724.2 = $-1,025 Mil.

Revenue was 1369.8 + 1423.1 + 1463.5 + 1538.4 = $5,795 Mil.
Gross Profit was 117.5 + 70.4 + 78.5 + 146 = $412 Mil.
Total Assets at the begining of last year (Mar12) was $4,691 Mil.
Total Assets was $3,906 Mil.
Long-Term Debt was $1,412 Mil.
Total Current Assets was $1,493 Mil.
Total Current Liabilities was $889 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.

AK Steel Holding Corp's current net income was -123. ==> Negative ==> Score 0.

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.

AK Steel Holding Corp's current cash flow from operations was -228. ==> Negative ==> Score 0.

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)
=-123/3906.1
=-0.03148921

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=-1025.4/4691.3
=-0.21857481

AK Steel Holding Corp's return on assets of this year was -0.03148921. AK Steel Holding Corp's return on assets of last year was -0.21857481. ==> 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.

AK Steel Holding Corp's current net income was -123. AK Steel Holding Corp's current cash flow from operations was -228. ==> -228 =< -123 ==> 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
=1657.2/3615.4
=0.45837252

Gearing (Last Year)=Long-Term Debt/Total Assets
=1411.9/3906.1
=0.36146028

AK Steel Holding Corp's gearing of this year was 0.45837252. AK Steel Holding Corp's gearing of last year was 0.36146028. ==> Last year is lower than this year ==> Score 0.

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
=1326.3/867.1
=1.52958136

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1492.6/888.6
=1.67972091

AK Steel Holding Corp's current ratio of this year was 1.52958136. AK Steel Holding Corp's current ratio of last year was 1.67972091. ==> 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.

AK Steel Holding Corp's number of shares in issue this year was 136.1. AK Steel Holding Corp's number of shares in issue last year was 135.7. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=393/5584.1
=0.0703784

Gross Margin (Last Year)=Gross Profit/Revenue
=412.4/5794.8
=0.07116725

AK Steel Holding Corp's gross margin of this year was 0.0703784. AK Steel Holding Corp's gross margin of last year was 0.07116725. ==> Last year's gross margin is higher ==> Score 0.

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)
=5584.1/3906.1
=1.4295845

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=5794.8/4691.3
=1.23522265

AK Steel Holding Corp's asset turnover of this year was 1.4295845. AK Steel Holding Corp's asset turnover of last year was 1.23522265. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+0+1+0+0+0+0+0+1
=2

Good or high score = 8 or 9

Bad or low score = 0 or 1

AK Steel Holding Corp has an F-score of 2. It is a bad or low score, which usually implies poor business operation.


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.

AK Steel Holding Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1011100000
Q2 1111110000
Q3 1011000001
Q4 0111110010
Q5 1111000100
Q6 1010100010
Q7 0011010000
Q8 1001000101
Q9 1011101101
F-score 7388531323

AK Steel Holding Corp Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 0000000000
Q2 0000000000
Q3 0000001111
Q4 0111111100
Q5 1000000000
Q6 0001111000
Q7 1110000000
Q8 1111010110
Q9 1100001111
F-score 4433234432
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