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Cincinnati Financial Corp (NAS:CINF)
Piotroski F-Score
5 (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

Cincinnati Financial Corp has an F-score of 5 indicating the company's financial situation is typical for a stable company.

CINF' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 7
Current: 5

2
7

During the past 13 years, the highest Piotroski F-Score of Cincinnati Financial Corp was 7. The lowest was 2. 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 (Sep15) TTM:Last Year (Sep14) TTM:
Net Income was 167 + 128 + 176 + 174 = $645 Mil.
Cash Flow from Operations was 240 + 215 + 255 + 285 = $995 Mil.
Revenue was 1262 + 1285 + 1316 + 1278 = $5,141 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of this year (Sep14)
to the end of this year (Sep15) was
(18474 + 18753 + 18897 + 18888 + 18751) / 5 = $18752.6 Mil.
Total Assets at the begining of this year (Sep14) was $18,474 Mil.
Long-Term Debt was $861 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 Mil.
Net Income was 122 + 91 + 84 + 183 = $480 Mil.

Revenue was 1172 + 1189 + 1214 + 1280 = $4,855 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of last year (Sep13)
to the end of last year (Sep14) was
(17339 + 17662 + 17942 + 18335 + 18474) / 5 = $17950.4 Mil.
Total Assets at the begining of last year (Sep13) was $17,339 Mil.
Long-Term Debt was $878 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 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.

Cincinnati Financial Corp's current net income (TTM) was 645. ==> 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.

Cincinnati Financial Corp's current cash flow from operations (TTM) was 995. ==> 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.

Cincinnati Financial Corp's return on assets of this year was 0.03491393. Cincinnati Financial Corp's return on assets of last year was 0.02768326. ==> This year is higher. ==> Score 1.

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.

Cincinnati Financial Corp's current net income (TTM) was 645. Cincinnati Financial Corp's current cash flow from operations (TTM) was 995. ==> 995 > 645 ==> 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 Sep14 to Sep15
=861/18752.6
=0.04591363

Gearing (Last Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=878/17950.4
=0.04891256

Cincinnati Financial Corp's gearing of this year was 0.04591363. Cincinnati Financial Corp's gearing of last year was 0.04891256. ==> This year is lower or equal to last year. ==> Score 1.

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
=0/0
=

Current Ratio (Last Year: Sep14)=Total Current Assets/Total Current Liabilities
=0/0
=

Cincinnati Financial Corp's current ratio of this year was . Cincinnati Financial Corp's current ratio of last year was . ==> Last year's current ratio is higher ==> Score 0.

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.

Cincinnati Financial Corp's number of shares in issue this year was 165.5. Cincinnati Financial Corp's number of shares in issue last year was 165. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=0/5141
=0

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=0/4855
=0

Cincinnati Financial Corp's gross margin of this year was 0. Cincinnati Financial Corp's gross margin of last year was 0. ==> 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 (Sep14)
=5141/18474
=0.27828299

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=4855/17339
=0.28000461

Cincinnati Financial Corp's asset turnover of this year was 0.27828299. Cincinnati Financial Corp's asset turnover of last year was 0.28000461. ==> 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+1+1+1+0+0+0+0
=5

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

Cincinnati Financial Corp 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.

Cincinnati Financial Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 111111111
Question 2 111111111
Question 3 100100110
Question 4 001111111
Question 5 110011111
Question 6 000000000
Question 7 111100001
Question 8 000000000
Question 9 100100111
F-score 644644666

Cincinnati Financial Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Question 1 111111111
Question 2 111111111
Question 3 110000111
Question 4 111111111
Question 5 111111111
Question 6 000000000
Question 7 000111000
Question 8 000000000
Question 9 111111110
F-score 665666665
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