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Bank of America Corporation (NYSE:BAC)
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

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

BAC' s 10-Year Piotroski F-Score Range
Min: 2   Max: 7
Current: 7

2
7

During the past 13 years, the highest Piotroski F-Score of Bank of America Corporation was 7. The lowest was 2. 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was -276 + 3439 + 2497 + 4012 = $9,672 Mil.
Cash Flow from Operations was 22723 + 11994 + 8227 + 46128 = $89,072 Mil.
Revenue was 22566 + 21488 + 21530 + 22727 = $88,311 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Total Assets at the begining of this year (Mar13) was $2,174,819 Mil.
Total Assets was $2,149,851 Mil.
Long-Term Debt was $254,785 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 Mil.
Net Income was 1483 + 732 + 340 + 2463 = $5,018 Mil.

Revenue was 23197 + 18660 + 20428 + 21968 = $84,253 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Total Assets at the begining of last year (Mar12) was $2,181,449 Mil.
Total Assets was $2,174,819 Mil.
Long-Term Debt was $279,641 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 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.

Bank of America Corporation's current net income was 9,672. ==> 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.

Bank of America Corporation's current cash flow from operations was 89,072. ==> 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)
=9672/2174819
=0.00444727

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=5018/2181449
=0.00230031

Bank of America Corporation's return on assets of this year was 0.00444727. Bank of America Corporation's return on assets of last year was 0.00230031. ==> 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.

Bank of America Corporation's current net income was 9,672. Bank of America Corporation's current cash flow from operations was 89,072. ==> 89,072 > 9,672 ==> 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)=Long-Term Debt/Total Assets
=254785/2149851
=0.11851286

Gearing (Last Year)=Long-Term Debt/Total Assets
=279641/2174819
=0.12858128

Bank of America Corporation's gearing of this year was 0.11851286. Bank of America Corporation's gearing of last year was 0.12858128. ==> 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
=0/0
=

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=0/0
=

Bank of America Corporation's current ratio of this year was . Bank of America Corporation's current ratio of last year was . ==> 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.

Bank of America Corporation's number of shares in issue this year was 10560.5. Bank of America Corporation's number of shares in issue last year was 11154.8. ==> 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
=0/88311
=0

Gross Margin (Last Year)=Gross Profit/Revenue
=0/84253
=0

Bank of America Corporation's gross margin of this year was 0. Bank of America Corporation's gross margin of last year was 0. ==> 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)
=88311/2174819
=0.04060614

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=84253/2181449
=0.03862249

Bank of America Corporation's asset turnover of this year was 0.04060614. Bank of America Corporation's asset turnover of last year was 0.03862249. ==> 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+1+1+0+1+0+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Bank of America Corporation 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.

Bank of America Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111110111
Q2 0011111101
Q3 1010010111
Q4 0000111101
Q5 1100000111
Q6 0000000000
Q7 0001000000
Q8 0000000000
Q9 1010010001
F-score 4243352536

Bank of America Corporation Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111011111
Q3 1111110111
Q4 1111011111
Q5 1111111111
Q6 0000000000
Q7 0000001001
Q8 0000000000
Q9 0011000011
F-score 5566355567
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