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Coca-Cola Enterprises Inc (NYSE:CCE)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, 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

Coca-Cola Enterprises Inc has an F-score of 7 indicating the company's financial situation is typical for a stable company.

CCE' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Coca-Cola Enterprises Inc was 9. 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 115 + 135 + 289 + 182 = $721 Mil.
Cash Flow from Operations was 67 + 236 + 450 + 133 = $886 Mil.
Revenue was 1870 + 2032 + 2174 + 2156 = $8,232 Mil.
Gross Profit was 650 + 688 + 787 + 753 = $2,878 Mil.
Total Assets at the begining of this year (Mar13) was $8,913 Mil.
Total Assets was $9,691 Mil.
Long-Term Debt was $3,730 Mil.
Total Current Assets was $2,770 Mil.
Total Current Liabilities was $2,564 Mil.
Net Income was 61 + 100 + 263 + 205 = $629 Mil.

Revenue was 1850 + 1916 + 2070 + 2208 = $8,044 Mil.
Gross Profit was 634 + 662 + 775 + 807 = $2,878 Mil.
Total Assets at the begining of last year (Mar12) was $9,164 Mil.
Total Assets was $8,913 Mil.
Long-Term Debt was $2,805 Mil.
Total Current Assets was $2,437 Mil.
Total Current Liabilities was $2,540 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.

Coca-Cola Enterprises Inc's current net income was 721. ==> 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.

Coca-Cola Enterprises Inc's current cash flow from operations was 886. ==> 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 (Mar13)
=721/8913
=0.08089308

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=629/9164
=0.06863815

Coca-Cola Enterprises Inc's return on assets of this year was 0.08089308. Coca-Cola Enterprises Inc's return on assets of last year was 0.06863815. ==> 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.

Coca-Cola Enterprises Inc's current net income was 721. Coca-Cola Enterprises Inc's current cash flow from operations was 886. ==> 886 > 721 ==> 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
=3730/9691
=0.3848932

Gearing (Last Year)=Long-Term Debt/Total Assets
=2805/8913
=0.31470885

Coca-Cola Enterprises Inc's gearing of this year was 0.3848932. Coca-Cola Enterprises Inc's gearing of last year was 0.31470885. ==> 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)=Total Current Assets/Total Current Liabilities
=2770/2564
=1.08034321

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2437/2540
=0.95944882

Coca-Cola Enterprises Inc's current ratio of this year was 1.08034321. Coca-Cola Enterprises Inc's current ratio of last year was 0.95944882. ==> 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.

Coca-Cola Enterprises Inc's number of shares in issue this year was 260. Coca-Cola Enterprises Inc's number of shares in issue last year was 285. ==> 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
=2878/8232
=0.34961127

Gross Margin (Last Year)=Gross Profit/Revenue
=2878/8044
=0.3577822

Coca-Cola Enterprises Inc's gross margin of this year was 0.34961127. Coca-Cola Enterprises Inc's gross margin of last year was 0.3577822. ==> 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 (Mar13)
=8232/8913
=0.92359475

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=8044/9164
=0.87778263

Coca-Cola Enterprises Inc's asset turnover of this year was 0.92359475. Coca-Cola Enterprises Inc's asset turnover of last year was 0.87778263. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+1+1+0+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Coca-Cola Enterprises Inc has an F-score of 7 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.

Coca-Cola Enterprises Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1101011111
Q2 1111111111
Q3 0001011100
Q4 1111111111
Q5 1101010010
Q6 1010111101
Q7 0010110111
Q8 0000011000
Q9 0111101100
F-score 5556587755

Coca-Cola Enterprises Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 1110000001
Q4 1011111111
Q5 0000100000
Q6 1000000011
Q7 1111111111
Q8 0000000000
Q9 1110001001
F-score 7564545457
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