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CareFusion Corp (NYSE:CFN)
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

CareFusion Corp has an F-score of 7 indicating the company's financial situation is typical for a stable company.

CFN' s 10-Year Piotroski F-Score Range
Min: 5   Max: 8
Current: 7

5
8

During the past 8 years, the highest Piotroski F-Score of CareFusion Corp was 8. The lowest was 5. And the median was 7.


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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 97 + 102 + 140 + 76 = $415 Mil.
Cash Flow from Operations was 223 + 158 + 230 + 68 = $679 Mil.
Revenue was 922 + 968 + 1122 + 922 = $3,934 Mil.
Gross Profit was 466 + 472 + 547 + 457 = $1,942 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(8492 + 8631 + 8663 + 9655 + 9007) / 5 = $8,890 Mil.
Total Assets as of Sep13 was $8,492 Mil.
Long-Term Debt was $1,988 Mil.
Total Current Assets was $3,106 Mil.
Total Current Liabilities was $626 Mil.
Net Income was 108 + 84 + 109 + 78 = $379 Mil.

Revenue was 909 + 901 + 903 + 830 = $3,543 Mil.
Gross Profit was 471 + 476 + 467 + 423 = $1,837 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(8253 + 8412 + 8728 + 8553 + 8492) / 5 = $8,488 Mil.
Total Assets as of Sep12 was $8,253 Mil.
Long-Term Debt was $999 Mil.
Total Current Assets was $3,168 Mil.
Total Current Liabilities was $973 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.

CareFusion Corp's current net income (ttm) was 415. ==> Positive ==> Score 1.

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.

CareFusion Corp's current cash flow from operations (ttm) was 679. ==> 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 (Sep13)
=415/8492
=0.04886952

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Sep12)
=379/8253
=0.04592269

CareFusion Corp's return on assets of this year was 0.04886952. CareFusion Corp's return on assets of last year was 0.04592269. ==> 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.

CareFusion Corp's current net income (ttm) was 415. CareFusion Corp's current cash flow from operations (ttm) was 679. ==> 679 > 415 ==> 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: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=1988/8889.6
=0.22363211

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=999/8487.6
=0.11770112

CareFusion Corp's gearing of this year was 0.22363211. CareFusion Corp's gearing of last year was 0.11770112. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=3106/626
=4.96166134

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=3168/973
=3.25590956

CareFusion Corp's current ratio of this year was 4.96166134. CareFusion Corp's current ratio of last year was 3.25590956. ==> 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.

CareFusion Corp's number of shares in issue this year was 207. CareFusion Corp's number of shares in issue last year was 217.4. ==> 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
=1942/3934
=0.49364514

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1837/3543
=0.51848716

CareFusion Corp's gross margin of this year was 0.49364514. CareFusion Corp's gross margin of last year was 0.51848716. ==> Last year's gross margin is higher ==> Score 0.

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 (Sep13)
=3934/8492
=0.46325954

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Sep12)
=3543/8253
=0.42929844

CareFusion Corp's asset turnover of this year was 0.46325954. CareFusion Corp's asset turnover of last year was 0.42929844. ==> 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

CareFusion Corp 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, 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.

CareFusion Corp Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Q1 1111
Q2 1111
Q3 1111
Q4 1111
Q5 0100
Q6 1010
Q7 0011
Q8 1010
Q9 0001
F-score 6576

CareFusion Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 1111111011
Q4 1111111111
Q5 1110011100
Q6 0111100001
Q7 1111111111
Q8 1101111000
Q9 0000000011
F-score 7877777567
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