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Bank of Montreal (NYSE:BMO)
Piotroski F-Score
2 (As of Today)

Warning Sign:

Piotroski F-Score of 2 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 3. It is a bad or low score, which usually implies poor business operation.

BMO' s 10-Year Piotroski F-Score Range
Min: 1   Max: 7
Current: 2

1
7

During the past 13 years, the highest Piotroski F-Score of Bank of Montreal was 7. The lowest was 1. 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 (Jan15) TTM:Last Year (Jan14) TTM:
Net Income was 966.333030027 + 1033.6157929 + 942.739921513 + 813.397129187 = $3,756 Mil.
Cash Flow from Operations was 1.81983621474 + 351.056895428 + -11215.6617909 + 0 = $-10,863 Mil.
Revenue was 3676.97907188 + 3924.94645684 + 3870.85265787 + 4170.10394324 = $15,643 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of this year (Jan14)
to the end of this year (Jan15) was
(541738.57404 + 529613.284804 + 546449.390074 + 525025.865144 + 554659.297146) / 5 = $539497.282242 Mil.
Total Assets at the begining of this year (Jan14) was $541,739 Mil.
Long-Term Debt was $4,095 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 Mil.
Net Income was 926.398429833 + 1064.42307692 + 1024.13127413 + 957.952468007 = $3,973 Mil.

Revenue was 3820.41216879 + 3846.15384615 + 3994.20849421 + 4094.14990859 = $15,755 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of last year (Jan13)
to the end of last year (Jan14) was
(546296.370968 + 544904.808636 + 528202.884615 + 518382.239382 + 541738.57404) / 5 = $535904.975528 Mil.
Total Assets at the begining of last year (Jan13) was $546,296 Mil.
Long-Term Debt was $3,641 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 Mil.

Profitability

Question 1. 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 3,756. ==> Positive ==> Score 1.

Question 2. 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.

Question 3. 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 (Jan14)
=3756.08587363/541738.57404
=0.00693339

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=3972.90524889/546296.370968
=0.00727244

Bank of Montreal's return on assets of this year was 0.00693339. Bank of Montreal's return on assets of last year was 0.00727244. ==> Last year is higher ==> Score 0.

Question 4. 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 3,756. Bank of Montreal's current cash flow from operations (TTM) was -10,863. ==> -10,863 <= 3,756 ==> CFROA <= ROA ==> Score 0.

Funding

Question 5. 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: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=4095.0338228/539497.282242
=0.00759046

Gearing (Last Year: Jan14)=Long-Term Debt/Average Total Assets from Jan13 to Jan14
=3640.7678245/535904.975528
=0.00679368

Bank of Montreal's gearing of this year was 0.00759046. Bank of Montreal's gearing of last year was 0.00679368. ==> Last year is lower than this year ==> Score 0.

Question 6. 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: Jan15)=Total Current Assets/Total Current Liabilities
=0/0
=

Current Ratio (Last Year: Jan14)=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.

Question 7. 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 0. Bank of Montreal's number of shares in issue last year was 646.7. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. 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
=0/15642.8821298
=0

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=0/15754.9244177
=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.

Question 9. 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 (Jan14)
=15642.8821298/541738.57404
=0.02887533

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=15754.9244177/546296.370968
=0.02883952

Bank of Montreal's asset turnover of this year was 0.02887533. Bank of Montreal's asset turnover of last year was 0.02883952. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+0+0+0+0+0+1+0+1
=3

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

Bank of Montreal has an F-score of 3. 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
Question 1 1111111111
Question 2 0101101110
Question 3 1000110100
Question 4 0001100110
Question 5 1001010110
Question 6 0000000000
Question 7 1011000001
Question 8 0000000000
Question 9 1000110100
F-score 5225542642

Bank of Montreal Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
Question 1 1111111111
Question 2 1011110000
Question 3 1001000000
Question 4 1000100000
Question 5 1111111100
Question 6 0000000000
Question 7 0000111001
Question 8 0000000000
Question 9 0000000011
F-score 6233564432
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