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Bank of Montreal (NYSE:BMO)
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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Bank of Montreal has an F-score of 1. It is a bad or low score, which usually implies poor business operation.

BMO' s 10-Year Piotroski F-Score Range
Min: 2   Max: 6
Current: 3

2
6

During the past 13 years, the highest Piotroski F-Score of Bank of Montreal was 6. 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 (Oct14) TTM:Last Year (Oct13) TTM:
Net Income was 957.952468007 + 966.333030027 + 1033.6157929 + 942.739921513 = $3,901 Mil.
Cash Flow from Operations was 0 + 1.81983621474 + 351.056895428 + -11215.6617909 = $-10,863 Mil.
Revenue was 3767.82449726 + 3676.97907188 + 3924.94645684 + 3870.85265787 = $15,241 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of this year (Oct13)
to the end of this year (Oct14) was
(518382.239382 + 541738.57404 + 529613.284804 + 546449.390074 + 525025.865144) / 5 = $532241.870689 Mil.
Total Assets at the begining of this year (Oct13) was $518,382 Mil.
Long-Term Debt was $4,382 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 Mil.
Net Income was 1026.20967742 + 926.398429833 + 1064.42307692 + 1024.13127413 = $4,041 Mil.

Revenue was 4064.51612903 + 3820.41216879 + 3846.15384615 + 3994.20849421 = $15,725 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of last year (Oct12)
to the end of last year (Oct13) was
(532369.807497 + 546296.370968 + 544904.808636 + 528202.884615 + 518382.239382) / 5 = $534031.22222 Mil.
Total Assets at the begining of last year (Oct12) was $532,370 Mil.
Long-Term Debt was $3,857 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 Montreal's current net income (TTM) was 3,901. ==> 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 Montreal's current cash flow from operations (TTM) was -10,863. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Oct13)
=3900.64121245/518382.239382
=0.00752464

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Oct12)
=4041.16245831/532369.807497
=0.00759089

Bank of Montreal's return on assets of this year was 0.00752464. Bank of Montreal's return on assets of last year was 0.00759089. ==> 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.

Bank of Montreal's current net income (TTM) was 3,901. Bank of Montreal's current cash flow from operations (TTM) was -10,863. ==> -10,863 <= 3,901 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=4381.91223689/532241.870689
=0.00823293

Gearing (Last Year: Oct13)=Long-Term Debt/Average Total Assets from Oct12 to Oct13
=3857.14285714/534031.22222
=0.00722269

Bank of Montreal's gearing of this year was 0.00823293. Bank of Montreal's gearing of last year was 0.00722269. ==> Last year is lower than this year ==> 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: Oct14)=Total Current Assets/Total Current Liabilities
=0/0
=

Current Ratio (Last Year: Oct13)=Total Current Assets/Total Current Liabilities
=0/0
=

Bank of Montreal's current ratio of this year was . Bank of Montreal'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 Montreal's number of shares in issue this year was 651.3. Bank of Montreal's number of shares in issue last year was 649.8. ==> 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
=0/15240.6026838
=0

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=0/15725.2906382
=0

Bank of Montreal's gross margin of this year was 0. Bank of Montreal'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 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 (Oct13)
=15240.6026838/518382.239382
=0.02940032

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Oct12)
=15725.2906382/532369.807497
=0.02953828

Bank of Montreal's asset turnover of this year was 0.02940032. Bank of Montreal's asset turnover of last year was 0.02953828. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

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

Bank of Montreal has an F-score of 1. It is a bad or low score, which usually implies poor business operation.


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 Montreal Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
Q1 1111111111
Q2 0101101110
Q3 1000110100
Q4 0001100110
Q5 1001010110
Q6 0000000000
Q7 1011000001
Q8 0000000000
Q9 1000110100
F-score 5225542642

Bank of Montreal Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Q1 1111111111
Q2 1101111000
Q3 1100100000
Q4 1100010000
Q5 1111111110
Q6 0000000000
Q7 0000011100
Q8 0000000000
Q9 1000000000
F-score 6623355443
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