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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 10-Year Piotroski F-Score Range
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 (Dec14) TTM:Last Year (Dec13) TTM:
Net Income was 48.684 + 59.697 + 28.079 + 56.212 = $193 Mil.
Cash Flow from Operations was -18.91 + 64.184 + 68.16 + 150.518 = $264 Mil.
Revenue was 716.83 + 750.096 + 727.413 + 730.658 = $2,925 Mil.
Gross Profit was 258.876 + 262.559 + 251.629 + 250.693 = $1,024 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(3559.607 + 3553.345 + 3632.763 + 3554.105 + 3447.928) / 5 = $3549.5496 Mil.
Total Assets at the begining of this year (Dec13) was $3,560 Mil.
Long-Term Debt was $749 Mil.
Total Current Assets was $1,195 Mil.
Total Current Liabilities was $640 Mil.
Net Income was 57.791 + 54.874 + 57.131 + 49.706 = $220 Mil.

Revenue was 627.571 + 648.746 + 637.515 + 681.449 = $2,595 Mil.
Gross Profit was 217.752 + 222.721 + 216.198 + 226.851 = $884 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(2889.878 + 2850.103 + 2872.4 + 2858.145 + 3559.607) / 5 = $3006.0266 Mil.
Total Assets at the begining of last year (Dec12) was $2,890 Mil.
Long-Term Debt was $749 Mil.
Total Current Assets was $1,149 Mil.
Total Current Liabilities was $669 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.

Crane Co's current net income (TTM) was 193. ==> 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.

Crane Co's current cash flow from operations (TTM) was 264. ==> 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 (Dec13)
=192.672/3559.607
=0.05412732

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=219.502/2889.878
=0.07595546

Crane Co's return on assets of this year was 0.05412732. Crane Co's return on assets of last year was 0.07595546. ==> 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.

Crane Co's current net income (TTM) was 193. Crane Co's current cash flow from operations (TTM) was 264. ==> 264 > 193 ==> 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: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=749.213/3549.5496
=0.21107269

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=749.17/3006.0266
=0.24922268

Crane Co's gearing of this year was 0.21107269. Crane Co's gearing of last year was 0.24922268. ==> 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: Dec14)=Total Current Assets/Total Current Liabilities
=1195.018/640.024
=1.86714561

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=1149.092/668.902
=1.71787796

Crane Co's current ratio of this year was 1.86714561. Crane Co's current ratio of last year was 1.71787796. ==> This year's current ratio is higher. ==> Score 1.

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.

Crane Co's number of shares in issue this year was 59.3. Crane Co's number of shares in issue last year was 59.1. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=1023.757/2924.997
=0.35000275

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=883.522/2595.281
=0.34043404

Crane Co's gross margin of this year was 0.35000275. Crane Co's gross margin of last year was 0.34043404. ==> 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 (Dec13)
=2924.997/3559.607
=0.82171908

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=2595.281/2889.878
=0.89805902

Crane Co's asset turnover of this year was 0.82171908. Crane Co's asset turnover of last year was 0.89805902. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Q1 1101111111
Q2 1111111111
Q3 1101110100
Q4 1111101111
Q5 1001111101
Q6 1010100101
Q7 0010101100
Q8 1101111011
Q9 0110011000
F-score 7656867746

Crane Co Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Q1 1111111111
Q2 1111111111
Q3 0111100000
Q4 1111111111
Q5 1111100001
Q6 1111000001
Q7 1110000000
Q8 0011111111
Q9 1000001110
F-score 7787645556
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