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Brady Corp (NYSE:BRC)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, 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

Brady Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

BRC' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 8

3
8

During the past 13 years, the highest Piotroski F-Score of Brady Corp was 8. The lowest was 3. 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 (Jul14) TTM:Last Year (Jul13) TTM:
Net Income was 23.928 + 16.424 + 24.088 + -110.409 = $-46 Mil.
Cash Flow from Operations was 25.593 + 16.184 + 34.063 + 17.58 = $93 Mil.
Revenue was 305.974 + 291.194 + 309.577 + 316.733 = $1,223 Mil.
Gross Profit was 156.945 + 142.536 + 155.12 + 154.06 = $609 Mil.
Average Total Assets from the begining of this year (Jul13)
to the end of this year (Jul14) was
(1438.683 + 1484.36 + 1438.04 + 1451.674 + 1253.665) / 5 = $1,413 Mil.
Total Assets as of Jul13 was $1,439 Mil.
Long-Term Debt was $159 Mil.
Total Current Assets was $464 Mil.
Total Current Liabilities was $292 Mil.
Net Income was 27.188 + -8.684 + 4.233 + -177.271 = $-155 Mil.

Revenue was 337.646 + 324.182 + 305.737 + 295.701 = $1,263 Mil.
Gross Profit was 164.62 + 150.052 + 159.706 + 153.56 = $628 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Jul13) was
(1607.719 + 1651.424 + 1785.969 + 1680.968 + 1438.683) / 5 = $1,633 Mil.
Total Assets as of Jul12 was $1,608 Mil.
Long-Term Debt was $201 Mil.
Total Current Assets was $512 Mil.
Total Current Liabilities was $323 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.

Brady Corp's current net income (ttm) was -46. ==> Negative ==> Score 0.

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.

Brady Corp's current cash flow from operations (ttm) was 93. ==> 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 (Jul13)
=-45.969/1438.683
=-0.03195214

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Jul12)
=-154.534/1607.719
=-0.09612003

Brady Corp's return on assets of this year was -0.03195214. Brady Corp's return on assets of last year was -0.09612003. ==> 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.

Brady Corp's current net income (ttm) was -46. Brady Corp's current cash flow from operations (ttm) was 93. ==> 93 > -46 ==> 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: Jul14)=Long-Term Debt/Average Total Assets from Jul13 to Jul14
=159.296/1413.2844
=0.11271334

Gearing (Last Year: Jul13)=Long-Term Debt/Average Total Assets from Jul12 to Jul13
=201.15/1632.9526
=0.12318178

Brady Corp's gearing of this year was 0.11271334. Brady Corp's gearing of last year was 0.12318178. ==> 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: Jul14)=Total Current Assets/Total Current Liabilities
=463.842/291.945
=1.58879926

Current Ratio (Last Year: Jul13)=Total Current Assets/Total Current Liabilities
=512.49/323.497
=1.58421871

Brady Corp's current ratio of this year was 1.58879926. Brady Corp's current ratio of last year was 1.58421871. ==> 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.

Brady Corp's number of shares in issue this year was 51.3. Brady Corp's number of shares in issue last year was 51.7. ==> 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: TTM)=Gross Profit/Revenue
=608.661/1223.478
=0.49748422

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=627.938/1263.266
=0.49707504

Brady Corp's gross margin of this year was 0.49748422. Brady Corp's gross margin of last year was 0.49707504. ==> 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 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 (Jul13)
=1223.478/1438.683
=0.85041528

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Jul12)
=1263.266/1607.719
=0.78575049

Brady Corp's asset turnover of this year was 0.85041528. Brady Corp's asset turnover of last year was 0.78575049. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+1+1+1+1+1+1+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Brady Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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.

Brady Corp Annual Data

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
Q1 1111111000
Q2 1111111111
Q3 1100011001
Q4 1111111111
Q5 1011101111
Q6 0101101001
Q7 0000100110
Q8 1001010010
Q9 0100010011
F-score 6646666466

Brady Corp Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 1001100000
Q2 1111111111
Q3 0001100001
Q4 1111111111
Q5 1011111111
Q6 1000000101
Q7 1111110011
Q8 0000111111
Q9 0001111001
F-score 6347865558
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