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Cencosud SA (NYSE:CNCO)
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

Cencosud SA has an F-score of 6 indicating the company's financial situation is typical for a stable company.

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

5
6

During the past 6 years, the highest Piotroski F-Score of Cencosud SA was 6. The lowest was 5. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was $400 Mil.
Cash Flow from Operations was $584 Mil.
Revenue was $16,546 Mil.
Gross Profit was $4,751 Mil.
Average Total Assets from the begining of this year (Dec12)
to the end of this year (Dec13) was (15589.7437488 + 16104.3747408) / 2 = $15847.0592448 Mil.
Total Assets at the begining of this year (Dec12) was $15,590 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $3,895 Mil.
Total Current Liabilities was $4,723 Mil.
Net Income was $400 Mil.

Revenue was $14,639 Mil.
Gross Profit was $4,162 Mil.
Average Total Assets from the begining of last year (Dec11)
to the end of last year (Dec12) was (12230.5404832 + 15589.7437488) / 2 = $13910.142116 Mil.
Total Assets at the begining of last year (Dec11) was $12,231 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $3,707 Mil.
Total Current Liabilities was $5,339 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.

Cencosud SA's current net income (TTM) was 400. ==> 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.

Cencosud SA's current cash flow from operations (TTM) was 584. ==> 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 (Dec12)
=399.8885584/15589.7437488
=0.02565075

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec11)
=399.933784/12230.5404832
=0.0326996

Cencosud SA's return on assets of this year was 0.02565075. Cencosud SA's return on assets of last year was 0.0326996. ==> 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.

Cencosud SA's current net income (TTM) was 400. Cencosud SA's current cash flow from operations (TTM) was 584. ==> 584 > 400 ==> 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: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=0/15847.0592448
=0

Gearing (Last Year: Dec12)=Long-Term Debt/Average Total Assets from Dec11 to Dec12
=0/13910.142116
=0

Cencosud SA's gearing of this year was 0. Cencosud SA's gearing of last year was 0. ==> 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: Dec13)=Total Current Assets/Total Current Liabilities
=3895.1757504/4722.7183984
=0.82477409

Current Ratio (Last Year: Dec12)=Total Current Assets/Total Current Liabilities
=3706.8984448/5338.6077776
=0.69435677

Cencosud SA's current ratio of this year was 0.82477409. Cencosud SA's current ratio of last year was 0.69435677. ==> 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.

Cencosud SA's number of shares in issue this year was 927.8. Cencosud SA's number of shares in issue last year was 783.3. ==> 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
=4751.185968/16545.6637232
=0.28715596

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=4161.9925344/14638.5233712
=0.28431778

Cencosud SA's gross margin of this year was 0.28715596. Cencosud SA's gross margin of last year was 0.28431778. ==> This year's gross margin is higher. ==> Score 1.

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 (Dec12)
=16545.6637232/15589.7437488
=1.06131723

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec11)
=14638.5233712/12230.5404832
=1.19688279

Cencosud SA's asset turnover of this year was 1.06131723. Cencosud SA's asset turnover of last year was 1.19688279. ==> 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+1+1+0+1+0
=6

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

Cencosud SA has an F-score of 6 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.

Cencosud SA Annual Data

Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 11
Question 2 10
Question 3 00
Question 4 10
Question 5 11
Question 6 11
Question 7 00
Question 8 10
Question 9 01
F-score 64
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