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Energy Company of Minas Gerais (NYSE:CIG)
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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Energy Company of Minas Gerais has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

CIG' s 10-Year Piotroski F-Score Range
Min: 4   Max: 7
Current: 7

4
7

During the past 13 years, the highest Piotroski F-Score of Energy Company of Minas Gerais was 7. The lowest was 4. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 348.498233216 + 354.495100128 + 537.672688172 + 331.338998211 = $1,572 Mil.
Cash Flow from Operations was 315.371024735 + 366.851299531 + 265.806451613 + 699.910554562 = $1,648 Mil.
Revenue was 1566.25441696 + 1688.96463571 + 2047.64387097 + 2118.85420394 = $7,422 Mil.
Gross Profit was 401.943462898 + 684.277801449 + 849.433978495 + 675.731663685 = $2,611 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(13841.6935113 + 13566.254417 + 12703.0251385 + 13646.4516129 + 14639.9821109) / 5 = $13679.4813581 Mil.
Total Assets at the begining of this 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.
Net Income was 462.259496793 + 1010.58710298 + 436.162802419 + 284.048780488 = $2,193 Mil.

Revenue was 1812.03749383 + 1833.01251203 + 1853.62600806 + 1582.60009204 = $7,081 Mil.
Gross Profit was 489.88653182 + 660.73147257 + 680.643145161 + 420.020708698 = $2,251 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(18338.3413086 + 19350.1021214 + 15673.7247353 + 0 + 13841.6935113) / 5 = $13440.7723353 Mil.
Total Assets at the begining of last year (Jun12) was $18,338 Mil.
Long-Term Debt was $3,240 Mil.
Total Current Assets was $3,447 Mil.
Total Current Liabilities was $2,867 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.

Energy Company of Minas Gerais's current net income (TTM) was 1,572. ==> 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.

Energy Company of Minas Gerais's current cash flow from operations (TTM) was 1,648. ==> 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)/Total Assets at the Beginning of This Year (Jun13)
=1572.00501973/13841.6935113
=0.11357028

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun12)
=2193.05818268/18338.3413086
=0.11958869

Energy Company of Minas Gerais's return on assets of this year was 0.11357028. Energy Company of Minas Gerais's return on assets of last year was 0.11958869. ==> Last year is higher ==> Score 0.

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.

Energy Company of Minas Gerais's current net income (TTM) was 1,572. Energy Company of Minas Gerais's current cash flow from operations (TTM) was 1,648. ==> 1,648 > 1,572 ==> 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
=3173.97137746/13679.4813581
=0.23202425

Gearing (Last Year: Jun13)=Long-Term Debt/Average Total Assets from Jun12 to Jun13
=3240.22089277/13440.7723353
=0.24107401

Energy Company of Minas Gerais's gearing of this year was 0.23202425. Energy Company of Minas Gerais's gearing of last year was 0.24107401. ==> This year is lower or equal to last year. ==> Score 1.

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
=3289.35599284/3902.05724508
=0.84297994

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=3446.84767602/2867.46433502
=1.20205424

Energy Company of Minas Gerais's current ratio of this year was 0.84297994. Energy Company of Minas Gerais's current ratio of last year was 1.20205424. ==> 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.

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

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
=2611.38690653/7421.71712757
=0.35185751

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2251.28185825/7081.27610597
=0.31792036

Energy Company of Minas Gerais's gross margin of this year was 0.35185751. Energy Company of Minas Gerais's gross margin of last year was 0.31792036. ==> 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 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 (Jun13)
=7421.71712757/13841.6935113
=0.53618563

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun12)
=7081.27610597/18338.3413086
=0.38614594

Energy Company of Minas Gerais's asset turnover of this year was 0.53618563. Energy Company of Minas Gerais's asset turnover of last year was 0.38614594. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

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 7. It is a good or high score, which usually indicates a very healthy situation.


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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 0101010010
Q4 0011111101
Q5 1001100110
Q6 1111001001
Q7 0011001010
Q8 1100000101
Q9 0001010001
F-score 5558455556

Energy Company of Minas Gerais Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 111111
Q2 111111
Q3 001100
Q4 100011
Q5 011001
Q6 000110
Q7 100101
Q8 111001
Q9 000011
F-score 5764065507
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