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Apache Corporation (NYSE:APA)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

Apache Corporation has an F-score of 6 indicating the company's financial situation is typical for a stable company.

APA' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of Apache Corporation was 9. The lowest was 3. And the median was 6.


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 236 + 174 + 306 + 1035 = $1,751 Mil.
Cash Flow from Operations was 2293 + 2477 + 1978 + 2759 = $9,507 Mil.
Revenue was 3675 + 3576 + 4019 + 4383 = $15,653 Mil.
Gross Profit was 3008 + 2879 + 3117 + 3474 = $12,478 Mil.
Total Assets at the begining of this year (Mar13) was $61,792 Mil.
Total Assets was $61,121 Mil.
Long-Term Debt was $9,673 Mil.
Total Current Assets was $5,463 Mil.
Total Current Liabilities was $4,356 Mil.
Net Income was 698 + 668 + 180 + 356 = $1,902 Mil.

Revenue was 3946 + 4391 + 4179 + 3972 = $16,488 Mil.
Gross Profit was 3151 + 3533 + 3292 + 3196 = $13,172 Mil.
Total Assets at the begining of last year (Mar12) was $53,237 Mil.
Total Assets was $61,792 Mil.
Long-Term Debt was $11,485 Mil.
Total Current Assets was $4,848 Mil.
Total Current Liabilities was $5,562 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.

Apache Corporation's current net income was 1,751. ==> 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.

Apache Corporation's current cash flow from operations was 9,507. ==> 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)
=1751/61792
=0.028337

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=1902/53237
=0.03572703

Apache Corporation's return on assets of this year was 0.028337. Apache Corporation's return on assets of last year was 0.03572703. ==> Last year is higher ==> Score 0.

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.

Apache Corporation's current net income was 1,751. Apache Corporation's current cash flow from operations was 9,507. ==> 9,507 > 1,751 ==> CFROA > ROA ==> Score 1.

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
=9673/61121
=0.15825985

Gearing (Last Year)=Long-Term Debt/Total Assets
=11485/61792
=0.18586548

Apache Corporation's gearing of this year was 0.15825985. Apache Corporation's gearing of last year was 0.18586548. ==> This year is lower. ==> 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
=5463/4356
=1.25413223

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=4848/5562
=0.87162891

Apache Corporation's current ratio of this year was 1.25413223. Apache Corporation's current ratio of last year was 0.87162891. ==> This year's current ratio is higher. ==> Score 1.

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.

Apache Corporation's number of shares in issue this year was 396. Apache Corporation's number of shares in issue last year was 408. ==> There is the same number of shares in issue this year, or fewer. ==> 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
=12478/15653
=0.79716348

Gross Margin (Last Year)=Gross Profit/Revenue
=13172/16488
=0.79888404

Apache Corporation's gross margin of this year was 0.79716348. Apache Corporation's gross margin of last year was 0.79888404. ==> 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)
=15653/61792
=0.25331758

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=16488/53237
=0.30970941

Apache Corporation's asset turnover of this year was 0.25331758. Apache Corporation's asset turnover of last year was 0.30970941. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+1+1+0+0
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Apache Corporation has an F-score of 6 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.

Apache Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111101111
Q2 1111111111
Q3 1100001000
Q4 1111111111
Q5 1110000101
Q6 0001110001
Q7 0010010010
Q8 1100101100
Q9 0100101000
F-score 6754646545

Apache Corporation Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 0000000000
Q4 1111111111
Q5 1100000111
Q6 0100001111
Q7 0011100001
Q8 1110000000
Q9 0000000000
F-score 5654434556
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