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

Warning Sign:

Piotroski F-Score of 3 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 3 indicating the company's financial situation is typical for a stable company.

AKS' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 3

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 4.


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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 35.2 + -31.7 + -40.4 + -9.9 = $-47 Mil.
Cash Flow from Operations was 113.5 + -119.2 + -97.5 + -7 = $-110 Mil.
Revenue was 1464.8 + 1331.3 + 1404.5 + 1369.8 = $5,570 Mil.
Gross Profit was 140.9 + 108.9 + 95.3 + 117.5 = $463 Mil.
Total Assets at the begining of this year (Dec12) was $3,903 Mil.
Total Assets was $3,606 Mil.
Long-Term Debt was $1,506 Mil.
Total Current Assets was $1,273 Mil.
Total Current Liabilities was $831 Mil.
Net Income was -230.4 + -60.9 + -724.2 + -11.8 = $-1,027 Mil.

Revenue was 1423.1 + 1463.5 + 1538.4 + 1508.7 = $5,934 Mil.
Gross Profit was 70.4 + 78.5 + 146 + 99.7 = $395 Mil.
Total Assets at the begining of last year (Dec11) was $4,450 Mil.
Total Assets was $3,903 Mil.
Long-Term Debt was $1,411 Mil.
Total Current Assets was $1,443 Mil.
Total Current Liabilities was $812 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 -47. ==> 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 -110. ==> 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 (Dec12)
=-46.8/3903.1
=-0.01199047

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=-1027.3/4449.9
=-0.23085912

AK Steel Holding Corp's return on assets of this year was -0.01199047. AK Steel Holding Corp's return on assets of last year was -0.23085912. ==> 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 -47. AK Steel Holding Corp's current cash flow from operations was -110. ==> -110 =< -47 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=1506.2/3605.7
=0.41772749

Gearing (Last Year)=Long-Term Debt/Total Assets
=1411.2/3903.1
=0.36155876

AK Steel Holding Corp's gearing of this year was 0.41772749. AK Steel Holding Corp's gearing of last year was 0.36155876. ==> Last year is lower ==> 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
=1273.2/831.4
=1.53139283

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1442.7/812.4
=1.77584934

AK Steel Holding Corp's current ratio of this year was 1.53139283. AK Steel Holding Corp's current ratio of last year was 1.77584934. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

AK Steel Holding Corp's number of shares in issue this year was 135.8. AK Steel Holding Corp's number of shares in issue last year was 121.7. ==> There is more 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
=462.6/5570.4
=0.0830461

Gross Margin (Last Year)=Gross Profit/Revenue
=394.6/5933.7
=0.06650151

AK Steel Holding Corp's gross margin of this year was 0.0830461. AK Steel Holding Corp's gross margin of last year was 0.06650151. ==> 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 (Dec12)
=5570.4/3903.1
=1.42717327

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=5933.7/4449.9
=1.3334457

AK Steel Holding Corp's asset turnover of this year was 1.42717327. AK Steel Holding Corp's asset turnover of last year was 1.3334457. ==> 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+1+1
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

AK Steel Holding Corp has an F-score of 3 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.

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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 0000000000
Q2 0000000000
Q3 0000000111
Q4 0011111110
Q5 0100000000
Q6 0000111100
Q7 0110000000
Q8 0111101011
Q9 1110000111
F-score 1442323443
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