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Energy Company of Minas Gerais (NYSE:CIG)
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

Energy Company of Minas Gerais has an F-score of 5 indicating the company's financial situation is typical for a stable company.

CIG' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 7
Current: 6

2
7

During the past 13 years, the highest Piotroski F-Score of Energy Company of Minas Gerais was 7. The lowest was 2. 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 (Sep15) TTM:Last Year (Jun14) TTM:
Net Income was 12.4042944523 + 422.768083576 + 171.610373751 + 42.7854068457 = $650 Mil.
Cash Flow from Operations was 455.964754694 + 183.579999243 + 156.184722178 + 363.291658127 = $1,159 Mil.
Revenue was 1624.10710467 + 2377.54192059 + 1732.81486004 + 1225.66099611 = $6,960 Mil.
Gross Profit was 555.626844604 + 483.38922745 + 677.121830511 + 344.076655052 = $2,060 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Sep15) was
(14639.9821109 + 0 + 13248.0411825 + 11926.9209757 + 9885.47858168) / 5 = $9940.08457015 Mil.
Total Assets at the begining of this year (Jun14) was $14,640 Mil.
Long-Term Debt was $2,380 Mil.
Total Current Assets was $2,126 Mil.
Total Current Liabilities was $2,459 Mil.
Net Income was 348.498233216 + 354.495100128 + 537.672688172 + 331.395348837 = $1,572 Mil.

Revenue was 1566.25441696 + 1688.96463571 + 2047.64387097 + 2102.41502683 = $7,405 Mil.
Gross Profit was 484.540636042 + 439.710268428 + 849.433978495 + 978.085867621 = $2,752 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(13841.6935113 + 13566.254417 + 12703.0251385 + 13646.4516129 + 14639.9821109) / 5 = $13679.4813581 Mil.
Total Assets at the begining of last year (Jun13) was $13,842 Mil.
Long-Term Debt was $3,174 Mil.
Total Current Assets was $3,289 Mil.
Total Current Liabilities was $3,902 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.

Energy Company of Minas Gerais's current net income (TTM) was 650. ==> 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.

Energy Company of Minas Gerais's current cash flow from operations (TTM) was 1,159. ==> 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 (Jun14)
=649.568158625/14639.9821109
=0.04436946

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=1572.06137035/13841.6935113
=0.11357435

Energy Company of Minas Gerais's return on assets of this year was 0.04436946. Energy Company of Minas Gerais's return on assets of last year was 0.11357435. ==> 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.

Energy Company of Minas Gerais's current net income (TTM) was 650. Energy Company of Minas Gerais's current cash flow from operations (TTM) was 1,159. ==> 1,159 > 650 ==> 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: Sep15)=Long-Term Debt/Average Total Assets from Jun14 to Sep15
=2380.09838082/9940.08457015
=0.23944448

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=3173.97137746/13679.4813581
=0.23202425

Energy Company of Minas Gerais's gearing of this year was 0.23944448. Energy Company of Minas Gerais's gearing of last year was 0.23202425. ==> 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: Sep15)=Total Current Assets/Total Current Liabilities
=2126.46034023/2459.26419348
=0.8646734

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=3289.35599284/3902.05724508
=0.84297994

Energy Company of Minas Gerais's current ratio of this year was 0.8646734. Energy Company of Minas Gerais's current ratio of last year was 0.84297994. ==> 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.

Energy Company of Minas Gerais's number of shares in issue this year was 0. Energy Company of Minas Gerais's number of shares in issue last year was 0. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=2060.21455762/6960.1248814
=0.29600253

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2751.77075059/7405.27795047
=0.37159588

Energy Company of Minas Gerais's gross margin of this year was 0.29600253. Energy Company of Minas Gerais's gross margin of last year was 0.37159588. ==> Last year's gross margin is higher ==> Score 0.

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 (Jun14)
=6960.1248814/14639.9821109
=0.47541895

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=7405.27795047/13841.6935113
=0.53499797

Energy Company of Minas Gerais's asset turnover of this year was 0.47541895. Energy Company of Minas Gerais's asset turnover of last year was 0.53499797. ==> Last year's asset turnover is higher ==> Score 0.

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+1+0+0
=5

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

Energy Company of Minas Gerais 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.

Energy Company of Minas Gerais Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 111111111
Question 2 011111111
Question 3 010100101
Question 4 001111011
Question 5 001001100
Question 6 110010010
Question 7 110010101
Question 8 010001001
Question 9 011100111
F-score 375555657

Energy Company of Minas Gerais Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Jun15Sep15Dec15
Question 1 11111
Question 2 11111
Question 3 10010
Question 4 01111
Question 5 00100
Question 6 11001
Question 7 00011
Question 8 00110
Question 9 11110
F-score 55675
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