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Brady Corp (NYSE:BRC)
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

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

BRC' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 5

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 (Apr14) TTM:Last Year (Apr13) TTM:
Net Income was 24.088 + 16.424 + 23.928 + -177.271 = $-113 Mil.
Cash Flow from Operations was 34.063 + 16.184 + 25.593 + 53.873 = $130 Mil.
Revenue was 309.577 + 291.194 + 305.974 + 304.909 = $1,212 Mil.
Gross Profit was 155.12 + 142.536 + 156.945 + 154.603 = $609 Mil.
Total Assets at the begining of this year (Apr13) was $1,681 Mil.
Total Assets was $1,452 Mil.
Long-Term Debt was $162 Mil.
Total Current Assets was $522 Mil.
Total Current Liabilities was $344 Mil.
Net Income was 4.233 + -8.684 + 27.188 + 11.659 = $34 Mil.

Revenue was 302.483 + 272.702 + 270.866 + 255.115 = $1,101 Mil.
Gross Profit was 159.401 + 141.891 + 149.524 + 143.327 = $594 Mil.
Total Assets at the begining of last year (Apr12) was $1,671 Mil.
Total Assets was $1,681 Mil.
Long-Term Debt was $218 Mil.
Total Current Assets was $504 Mil.
Total Current Liabilities was $319 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.

Brady Corp's current net income was -113. ==> Negative ==> Score 0.

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.

Brady Corp's current cash flow from operations was 130. ==> 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 (Apr13)
=-112.831/1680.968
=-0.06712263

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Apr12)
=34.396/1671.14
=0.02058236

Brady Corp's return on assets of this year was -0.06712263. Brady Corp's return on assets of last year was 0.02058236. ==> 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.

Brady Corp's current net income was -113. Brady Corp's current cash flow from operations was 130. ==> 130 > -113 ==> 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
=162.468/1451.674
=0.11191769

Gearing (Last Year)=Long-Term Debt/Total Assets
=218.378/1680.968
=0.12991205

Brady Corp's gearing of this year was 0.11191769. Brady Corp's gearing of last year was 0.12991205. ==> 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
=522.482/344.467
=1.5167839

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=504.067/319.3
=1.5786627

Brady Corp's current ratio of this year was 1.5167839. Brady Corp's current ratio of last year was 1.5786627. ==> 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.

Brady Corp's number of shares in issue this year was 52. Brady Corp's number of shares in issue last year was 52. ==> 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
=609.204/1211.654
=0.5027871

Gross Margin (Last Year)=Gross Profit/Revenue
=594.143/1101.166
=0.53955807

Brady Corp's gross margin of this year was 0.5027871. Brady Corp's gross margin of last year was 0.53955807. ==> 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 (Apr13)
=1211.654/1680.968
=0.7208073

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Apr12)
=1101.166/1671.14
=0.65893103

Brady Corp's asset turnover of this year was 0.7208073. Brady Corp's asset turnover of last year was 0.65893103. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+1+0+1+1+0+1+0+1
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Brady Corp 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


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

Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13
Q1 1111111100
Q2 1111111111
Q3 1110001100
Q4 1111111111
Q5 0100110111
Q6 0010110100
Q7 0000010011
Q8 1100101100
Q9 1010001001
F-score 6663666745

Brady Corp Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
Q1 1100110000
Q2 1111111111
Q3 0000110000
Q4 1111111111
Q5 1101111111
Q6 1100000010
Q7 1111111001
Q8 1100001000
Q9 0011111111
F-score 7745776455
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