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Beam Inc (NYSE:BEAM)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

Beam Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

BEAM' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 5

4
8

During the past 13 years, the highest Piotroski F-Score of Beam Inc was 8. The lowest was 4. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 114.5 + 74.3 + 84.8 + 90.3 = $364 Mil.
Cash Flow from Operations was -59.5 + 31.1 + 142.5 + 309.7 = $424 Mil.
Revenue was 577.7 + 637.6 + 598.7 + 739.5 = $2,554 Mil.
Gross Profit was 349.1 + 374.1 + 343.4 + 414.6 = $1,481 Mil.
Average Total Assets from the begining of this year (Dec12)
to the end of this year (Dec13) was
(8676.1 + 8261.2 + 8563.7 + 8510 + 8584.7) / 5 = $8,519 Mil.
Total Assets as of Dec12 was $8,676 Mil.
Long-Term Debt was $2,025 Mil.
Total Current Assets was $2,890 Mil.
Total Current Liabilities was $707 Mil.
Net Income was 79.1 + 101.1 + 96.2 + 110.9 = $387 Mil.

Revenue was 533.8 + 597 + 626.7 + 709.2 = $2,467 Mil.
Gross Profit was 314.7 + 347.6 + 371 + 405.4 = $1,439 Mil.
Average Total Assets from the begining of last year (Dec11)
to the end of last year (Dec12) was
(7491.8 + 7639.3 + 8200.4 + 8404.7 + 8676.1) / 5 = $8,082 Mil.
Total Assets as of Dec11 was $7,492 Mil.
Long-Term Debt was $2,025 Mil.
Total Current Assets was $2,903 Mil.
Total Current Liabilities was $1,251 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Beam Inc's current net income (ttm) was 364. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Beam Inc's current cash flow from operations (ttm) was 424. ==> 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)/Beginning of This Year Total Assets (Dec12)
=363.9/8676.1
=0.04194281

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Dec11)
=387.3/7491.8
=0.05169652

Beam Inc's return on assets of this year was 0.04194281. Beam Inc's return on assets of last year was 0.05169652. ==> 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.

Beam Inc's current net income (ttm) was 364. Beam Inc's current cash flow from operations (ttm) was 424. ==> 424 > 364 ==> 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: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=2024.5/8519.14
=0.23764136

Gearing (Last Year: Dec12)=Long-Term Debt/Average Total Assets from Dec11 to Dec12
=2024.9/8082.46
=0.25053016

Beam Inc's gearing of this year was 0.23764136. Beam Inc's gearing of last year was 0.25053016. ==> 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: Dec13)=Total Current Assets/Total Current Liabilities
=2890.1/706.6
=4.09015001

Current Ratio (Last Year: Dec12)=Total Current Assets/Total Current Liabilities
=2902.6/1250.7
=2.32078036

Beam Inc's current ratio of this year was 4.09015001. Beam Inc's current ratio of last year was 2.32078036. ==> 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.

Beam Inc's number of shares in issue this year was 164.9. Beam Inc's number of shares in issue last year was 161.4. ==> 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
=1481.2/2553.5
=0.58006658

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1438.7/2466.7
=0.58324888

Beam Inc's gross margin of this year was 0.58006658. Beam Inc's gross margin of last year was 0.58324888. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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)/Beginning of This Year Total Assets (Dec12)
=2553.5/8676.1
=0.29431427

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Dec11)
=2466.7/7491.8
=0.32925332

Beam Inc's asset turnover of this year was 0.29431427. Beam Inc's asset turnover of last year was 0.32925332. ==> 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+0+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Beam Inc has an F-score of 5 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, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Beam Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1000001100
Q4 1111111001
Q5 1011001101
Q6 1011100101
Q7 1000110000
Q8 0110011010
Q9 0000010110
F-score 7465566645

Beam Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1111000010
Q4 0000000001
Q5 1111000011
Q6 1111101111
Q7 0000000000
Q8 1011010010
Q9 0100011110
F-score 6666344475
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