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Crane Co (NYSE:CR)
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

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

CR' 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 Crane 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 (Jun16) TTM:Last Year (Jun15) TTM:
Net Income was 56.9 + 65.2 + 55 + 68.2 = $245 Mil.
Cash Flow from Operations was 69.7 + 113.6 + -18 + 69.8 = $235 Mil.
Revenue was 669.9 + 680.5 + 660 + 712.2 = $2,723 Mil.
Gross Profit was 238.2 + 239 + 233.9 + 263.1 = $974 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(3428.1 + 3402.7 + 3341.6 + 3395 + 3432.4) / 5 = $3399.96 Mil.
Total Assets at the begining of this year (Jun15) was $3,428 Mil.
Long-Term Debt was $745 Mil.
Total Current Assets was $1,309 Mil.
Total Current Liabilities was $602 Mil.
Net Income was 28.1 + 56.2 + 51.1 + 55.8 = $191 Mil.

Revenue was 727.4 + 730.7 + 678.8 + 711.2 = $2,848 Mil.
Gross Profit was 251.1 + 249.1 + 236.8 + 240.5 = $978 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(3632.763 + 3554.105 + 3450.8 + 3387.3 + 3428.1) / 5 = $3490.6136 Mil.
Total Assets at the begining of last year (Jun14) was $3,633 Mil.
Long-Term Debt was $749 Mil.
Total Current Assets was $1,224 Mil.
Total Current Liabilities was $656 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.

Crane Co's current net income (TTM) was 245. ==> 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.

Crane Co's current cash flow from operations (TTM) was 235. ==> 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 (Jun15)
=245.3/3428.1
=0.07155567

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=191.2/3632.763
=0.05263212

Crane Co's return on assets of this year was 0.07155567. Crane Co's return on assets of last year was 0.05263212. ==> 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.

Crane Co's current net income (TTM) was 245. Crane Co's current cash flow from operations (TTM) was 235. ==> 235 <= 245 ==> CFROA <= ROA ==> Score 0.

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: Jun16)=Long-Term Debt/Average Total Assets from Jun15 to Jun16
=745/3399.96
=0.21912022

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=749.2/3490.6136
=0.21463275

Crane Co's gearing of this year was 0.21912022. Crane Co's gearing of last year was 0.21463275. ==> 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: Jun16)=Total Current Assets/Total Current Liabilities
=1308.5/601.6
=2.17503324

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=1224.4/655.8
=1.86703263

Crane Co's current ratio of this year was 2.17503324. Crane Co's current ratio of last year was 1.86703263. ==> 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.

Crane Co's number of shares in issue this year was 59.2. Crane Co's number of shares in issue last year was 58.8. ==> 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
=974.2/2722.6
=0.35781973

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=977.5/2848.1
=0.34321126

Crane Co's gross margin of this year was 0.35781973. Crane Co's gross margin of last year was 0.34321126. ==> 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 (Jun15)
=2722.6/3428.1
=0.79420087

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=2848.1/3632.763
=0.7840038

Crane Co's asset turnover of this year was 0.79420087. Crane Co's asset turnover of last year was 0.7840038. ==> This year's asset turnover is higher. ==> Score 1.

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+0+0+1+0+1+1
=6

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

Crane 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.

Crane Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1011111111
Question 2 1111111111
Question 3 1011101001
Question 4 1111011111
Question 5 0011011010
Question 6 0101001011
Question 7 0101011001
Question 8 1011100111
Question 9 1100110000
F-score 6568567467

Crane Co Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1111111111
Question 2 1111111111
Question 3 0000000111
Question 4 1111111100
Question 5 0001111000
Question 6 0001111111
Question 7 0000111110
Question 8 1111100111
Question 9 1110000001
F-score 5556766766
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