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Air Products & Chemicals Inc (NYSE:APD)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Air Products & Chemicals Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

APD' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 6

4
8

During the past 13 years, the highest Piotroski F-Score of Air Products & Chemicals Inc was 8. The lowest was 4. 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 290.2 + 283.5 + 314 + 104 = $992 Mil.
Cash Flow from Operations was 546.9 + 477.8 + 559.3 + 602.4 = $2,186 Mil.
Revenue was 2545.5 + 2581.9 + 2634.6 + 2677 = $10,439 Mil.
Gross Profit was 679.6 + 664.3 + 715.9 + 744.6 = $2,804 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(17850.1 + 17915.2 + 17963 + 18316.2 + 17779.1) / 5 = $17964.72 Mil.
Total Assets at the begining of this year (Sep13) was $17,850 Mil.
Long-Term Debt was $4,825 Mil.
Total Current Assets was $3,295 Mil.
Total Current Liabilities was $2,963 Mil.
Net Income was 278.3 + 290.4 + 288.4 + 137.1 = $994 Mil.

Revenue was 2562.4 + 2484.2 + 2547.3 + 2586.5 = $10,180 Mil.
Gross Profit was 662.3 + 670.6 + 671.8 + 703.6 = $2,708 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(16941.8 + 17393.1 + 17221.2 + 17491.3 + 17850.1) / 5 = $17379.5 Mil.
Total Assets at the begining of last year (Sep12) was $16,942 Mil.
Long-Term Debt was $5,056 Mil.
Total Current Assets was $3,439 Mil.
Total Current Liabilities was $3,228 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.

Air Products & Chemicals Inc's current net income (TTM) was 992. ==> 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.

Air Products & Chemicals Inc's current cash flow from operations (TTM) was 2,186. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Sep13)
=991.7/17850.1
=0.05555711

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=994.2/16941.8
=0.05868326

Air Products & Chemicals Inc's return on assets of this year was 0.05555711. Air Products & Chemicals Inc's return on assets of last year was 0.05868326. ==> 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.

Air Products & Chemicals Inc's current net income (TTM) was 992. Air Products & Chemicals Inc's current cash flow from operations (TTM) was 2,186. ==> 2,186 > 992 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=4824.5/17964.72
=0.26855414

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=5056.3/17379.5
=0.29093472

Air Products & Chemicals Inc's gearing of this year was 0.26855414. Air Products & Chemicals Inc's gearing of last year was 0.29093472. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=3294.8/2963
=1.1119811

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=3439.1/3227.6
=1.06552857

Air Products & Chemicals Inc's current ratio of this year was 1.1119811. Air Products & Chemicals Inc's current ratio of last year was 1.06552857. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Air Products & Chemicals Inc's number of shares in issue this year was 216.1. Air Products & Chemicals Inc's number of shares in issue last year was 213.5. ==> 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: TTM)=Gross Profit/Revenue
=2804.4/10439
=0.26864642

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2708.3/10180.4
=0.2660308

Air Products & Chemicals Inc's gross margin of this year was 0.26864642. Air Products & Chemicals Inc's gross margin of last year was 0.2660308. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year 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 (TTM)/Total Assets at the Beginning of This Year (Sep13)
=10439/17850.1
=0.58481465

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=10180.4/16941.8
=0.60090427

Air Products & Chemicals Inc's asset turnover of this year was 0.58481465. Air Products & Chemicals Inc's asset turnover of last year was 0.60090427. ==> 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+0+1+0
=6

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Air Products & Chemicals Inc 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.

Air Products & Chemicals Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
Q1 1111111111
Q2 1111111111
Q3 1010011000
Q4 1111111111
Q5 1000010011
Q6 0011011001
Q7 0111100110
Q8 0010110001
Q9 1101011000
F-score 6576586456

Air Products & Chemicals Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 1000000000
Q4 1111111111
Q5 1000011111
Q6 0000000111
Q7 1111110000
Q8 0000001011
Q9 0000100000
F-score 6444555566
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