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Cincinnati Bell Inc (NYSE:CBB)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

Cincinnati Bell Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

CBB' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 7
Current: 6

3
7

During the past 13 years, the highest Piotroski F-Score of Cincinnati Bell Inc was 7. The lowest was 3. 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 local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was 7 + 77.6 + 18.8 + -1.3 = $102 Mil.
Cash Flow from Operations was 66 + 32.1 + 43.6 + 31.5 = $173 Mil.
Revenue was 288.9 + 299.2 + 312.4 + 285.3 = $1,186 Mil.
Gross Profit was 126.2 + 128.4 + 128.6 + 123.7 = $507 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(1454.4 + 1444.6 + 1423.2 + 1529.9 + 1541) / 5 = $1478.62 Mil.
Total Assets at the begining of this year (Dec15) was $1,454 Mil.
Long-Term Debt was $1,199 Mil.
Total Current Assets was $230 Mil.
Total Current Liabilities was $233 Mil.
Net Income was 49.2 + 191.6 + 80.3 + 32.6 = $354 Mil.

Revenue was 292.9 + 285.8 + 299.8 + 289.3 = $1,168 Mil.
Gross Profit was 126.7 + 123.6 + 124.2 + 122.7 = $497 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(1820.7 + 1733 + 1509.6 + 1460.2 + 1454.4) / 5 = $1595.58 Mil.
Total Assets at the begining of last year (Dec14) was $1,821 Mil.
Long-Term Debt was $1,234 Mil.
Total Current Assets was $200 Mil.
Total Current Liabilities was $259 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.

Cincinnati Bell Inc's current net income (TTM) was 102. ==> 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.

Cincinnati Bell Inc's current cash flow from operations (TTM) was 173. ==> Positive ==> Score 1.

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 (Dec15)
=102.1/1454.4
=0.07020077

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=353.7/1820.7
=0.19426594

Cincinnati Bell Inc's return on assets of this year was 0.07020077. Cincinnati Bell Inc's return on assets of last year was 0.19426594. ==> 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.

Cincinnati Bell Inc's current net income (TTM) was 102. Cincinnati Bell Inc's current cash flow from operations (TTM) was 173. ==> 173 > 102 ==> CFROA > ROA ==> Score 1.

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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=1199.1/1478.62
=0.81095887

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=1233.5/1595.58
=0.77307311

Cincinnati Bell Inc's gearing of this year was 0.81095887. Cincinnati Bell Inc's gearing of last year was 0.77307311. ==> 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: Dec16)=Total Current Assets/Total Current Liabilities
=229.9/232.9
=0.98711894

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=200.4/259.2
=0.77314815

Cincinnati Bell Inc's current ratio of this year was 0.98711894. Cincinnati Bell Inc's current ratio of last year was 0.77314815. ==> This year's current ratio is higher. ==> Score 1.

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.

Cincinnati Bell Inc's number of shares in issue this year was 42.1. Cincinnati Bell Inc's number of shares in issue last year was 42. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=506.9/1185.8
=0.42747512

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=497.2/1167.8
=0.42575784

Cincinnati Bell Inc's gross margin of this year was 0.42747512. Cincinnati Bell Inc's gross margin of last year was 0.42575784. ==> This year's gross margin is higher. ==> Score 1.

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 (Dec15)
=1185.8/1454.4
=0.81531903

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=1167.8/1820.7
=0.64140166

Cincinnati Bell Inc's asset turnover of this year was 0.81531903. Cincinnati Bell Inc's asset turnover of last year was 0.64140166. ==> 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+1+0+1+0+1+0+1+1
=6

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

Cincinnati Bell Inc has an F-score of 6 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 local exchange's currency.

Cincinnati Bell Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 1111110111
Question 2 1111111111
Question 3 0100000110
Question 4 1111111101
Question 5 1100101110
Question 6 0000001011
Question 7 0111100000
Question 8 0011000001
Question 9 0101000111
F-score 4756534666

Cincinnati Bell Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 1111111100
Question 4 1110000011
Question 5 0111111000
Question 6 1010010011
Question 7 0000000100
Question 8 0000000011
Question 9 0100111111
F-score 5664565566
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