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Campbell Soup Co (NYSE:CPB)
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

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

CPB' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 8
Current: 6

4
8

During the past 13 years, the highest Piotroski F-Score of Campbell Soup Co was 8. 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 (Jan16) TTM:Last Year (Jan15) TTM:
Net Income was 182 + 68 + 194 + 265 = $709 Mil.
Cash Flow from Operations was 387 + 211 + 218 + 509 = $1,325 Mil.
Revenue was 1900 + 1693 + 2203 + 2201 = $7,997 Mil.
Gross Profit was 682 + 612 + 755 + 819 = $2,868 Mil.
Average Total Assets from the begining of this year (Jan15)
to the end of this year (Jan16) was
(7903 + 7759 + 8089 + 8304 + 8079) / 5 = $8026.8 Mil.
Total Assets at the begining of this year (Jan15) was $7,903 Mil.
Long-Term Debt was $2,551 Mil.
Total Current Assets was $2,132 Mil.
Total Current Liabilities was $2,566 Mil.
Net Income was 184 + 137 + 248 + 222 = $791 Mil.

Revenue was 1970 + 1852 + 2255 + 2234 = $8,311 Mil.
Gross Profit was 676 + 631 + 795 + 743 = $2,845 Mil.
Average Total Assets from the begining of last year (Jan14)
to the end of last year (Jan15) was
(8119 + 7964 + 8113 + 8297 + 7903) / 5 = $8079.2 Mil.
Total Assets at the begining of last year (Jan14) was $8,119 Mil.
Long-Term Debt was $2,253 Mil.
Total Current Assets was $2,090 Mil.
Total Current Liabilities was $2,850 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.

Campbell Soup Co's current net income (TTM) was 709. ==> 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.

Campbell Soup Co's current cash flow from operations (TTM) was 1,325. ==> 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.

Campbell Soup Co's return on assets of this year was 0.08971277. Campbell Soup Co's return on assets of last year was 0.09742579. ==> 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.

Campbell Soup Co's current net income (TTM) was 709. Campbell Soup Co's current cash flow from operations (TTM) was 1,325. ==> 1,325 > 709 ==> 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: Jan16)=Long-Term Debt/Average Total Assets from Jan15 to Jan16
=2551/8026.8
=0.31781034

Gearing (Last Year: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=2253/8079.2
=0.27886424

Campbell Soup Co's gearing of this year was 0.31781034. Campbell Soup Co's gearing of last year was 0.27886424. ==> 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: Jan16)=Total Current Assets/Total Current Liabilities
=2132/2566
=0.83086516

Current Ratio (Last Year: Jan15)=Total Current Assets/Total Current Liabilities
=2090/2850
=0.73333333

Campbell Soup Co's current ratio of this year was 0.83086516. Campbell Soup Co's current ratio of last year was 0.73333333. ==> 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.

Campbell Soup Co's number of shares in issue this year was 312. Campbell Soup Co's number of shares in issue last year was 314. ==> 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
=2868/7997
=0.35863449

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2845/8311
=0.34231741

Campbell Soup Co's gross margin of this year was 0.35863449. Campbell Soup Co's gross margin of last year was 0.34231741. ==> 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 (Jan15)
=7997/7903
=1.01189422

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan14)
=8311/8119
=1.02364823

Campbell Soup Co's asset turnover of this year was 1.01189422. Campbell Soup Co's asset turnover of last year was 1.02364823. ==> 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+1+0
=6

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

Campbell Soup Co 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.

Campbell Soup Co Annual Data

Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15
Question 1 1111111111
Question 2 1111111111
Question 3 1010100010
Question 4 1001111111
Question 5 1010101010
Question 6 0101010011
Question 7 0111111111
Question 8 1001100000
Question 9 1010100101
F-score 7466855576

Campbell Soup Co Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
Question 1 1111111111
Question 2 1111111111
Question 3 0001111000
Question 4 1111111111
Question 5 1111000000
Question 6 0001111111
Question 7 0111111111
Question 8 0000000001
Question 9 0000111110
F-score 4557777666
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