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Charter Communications Inc (NAS:CHTR)
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

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

CHTR' s 10-Year Piotroski F-Score Range
Min: 3   Max: 6
Current: 5

3
6

During the past 13 years, the highest Piotroski F-Score of Charter Communications Inc was 6. 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 own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was -70 + 39 + -37 + -45 = $-113 Mil.
Cash Flow from Operations was 538 + 595 + 577 + 632 = $2,342 Mil.
Revenue was 2118 + 2148 + 2202 + 2259 = $8,727 Mil.
Gross Profit was 721 + 753 + 767 + 1124 = $3,365 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(15589 + 17250 + 17295 + 17297 + 17369) / 5 = $16,960 Mil.
Total Assets as of Jun13 was $15,589 Mil.
Long-Term Debt was $14,019 Mil.
Total Current Assets was $337 Mil.
Total Current Liabilities was $1,606 Mil.
Net Income was -87 + -40 + -42 + -96 = $-265 Mil.

Revenue was 1880 + 1913 + 1917 + 1972 = $7,682 Mil.
Gross Profit was 638 + 685 + 659 + 977 = $2,959 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(15553 + 16497 + 15596 + 15639 + 15589) / 5 = $15,775 Mil.
Total Assets as of Jun12 was $15,553 Mil.
Long-Term Debt was $12,812 Mil.
Total Current Assets was $333 Mil.
Total Current Liabilities was $1,280 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.

Charter Communications Inc's current net income (ttm) was -113. ==> 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.

Charter Communications Inc's current cash flow from operations (ttm) was 2,342. ==> 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 (Jun13)
=-113/15589
=-0.0072487

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Jun12)
=-265/15553
=-0.01703851

Charter Communications Inc's return on assets of this year was -0.0072487. Charter Communications Inc's return on assets of last year was -0.01703851. ==> 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.

Charter Communications Inc's current net income (ttm) was -113. Charter Communications Inc's current cash flow from operations (ttm) was 2,342. ==> 2,342 > -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: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=14019/16960
=0.82659198

Gearing (Last Year: Jun13)=Long-Term Debt/Average Total Assets from Jun12 to Jun13
=12812/15774.8
=0.81218145

Charter Communications Inc's gearing of this year was 0.82659198. Charter Communications Inc's gearing of last year was 0.81218145. ==> 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: Jun14)=Total Current Assets/Total Current Liabilities
=337/1606
=0.20983811

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=333/1280
=0.26015625

Charter Communications Inc's current ratio of this year was 0.20983811. Charter Communications Inc's current ratio of last year was 0.26015625. ==> 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.

Charter Communications Inc's number of shares in issue this year was 108. Charter Communications Inc's number of shares in issue last year was 100.6. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=3365/8727
=0.38558497

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2959/7682
=0.38518615

Charter Communications Inc's gross margin of this year was 0.38558497. Charter Communications Inc's gross margin of last year was 0.38518615. ==> 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 (Jun13)
=8727/15589
=0.55981782

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Jun12)
=7682/15553
=0.493924

Charter Communications Inc's asset turnover of this year was 0.55981782. Charter Communications Inc's asset turnover of last year was 0.493924. ==> 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+0+0+0+1+1
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Charter Communications Inc 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, 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.

Charter Communications Inc Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec10Dec11Dec12Dec13
Q1 0000000000
Q2 1111111111
Q3 1010001011
Q4 1111111111
Q5 0000001110
Q6 0100010000
Q7 0000001110
Q8 0000110100
Q9 1111111011
F-score 4443456564

Charter Communications Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 0000000000
Q2 1111111111
Q3 1111111111
Q4 1111111111
Q5 0011100000
Q6 0100000000
Q7 1110000000
Q8 0000011111
Q9 1111111111
F-score 5665555550
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