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E I du Pont de Nemours & Company (NYSE:DD)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

E I du Pont de Nemours & Company has an F-score of 6 indicating the company's financial situation is typical for a stable company.

DD' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of E I du Pont de Nemours & Company was 9. The lowest was 3. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 1070 + 1439 + 185 + 285 = $2,979 Mil.
Cash Flow from Operations was 350 + -2421 + 5512 + 298 = $3,739 Mil.
Revenue was 10114 + 10145 + 7836 + 7805 = $35,900 Mil.
Gross Profit was 4115 + 4145 + 2703 + 2640 = $13,603 Mil.
Total Assets at the begining of this year (Jun13) was $51,349 Mil.
Total Assets was $48,314 Mil.
Long-Term Debt was $9,292 Mil.
Total Current Assets was $21,329 Mil.
Total Current Liabilities was $11,039 Mil.
Net Income was 1030 + 3348 + 92 + 5 = $4,475 Mil.

Revenue was 10003 + 10500 + 7572 + 7336 = $35,411 Mil.
Gross Profit was 3947 + 4307 + 2592 + 2557 = $13,403 Mil.
Total Assets at the begining of last year (Jun12) was $50,031 Mil.
Total Assets was $51,349 Mil.
Long-Term Debt was $10,765 Mil.
Total Current Assets was $23,237 Mil.
Total Current Liabilities was $11,890 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.

E I du Pont de Nemours & Company's current net income was 2,979. ==> 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.

E I du Pont de Nemours & Company's current cash flow from operations was 3,739. ==> 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/Total Assets at the beginning of this year (Jun13)
=2979/51349
=0.05801476

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=4475/50031
=0.08944454

E I du Pont de Nemours & Company's return on assets of this year was 0.05801476. E I du Pont de Nemours & Company's return on assets of last year was 0.08944454. ==> 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.

E I du Pont de Nemours & Company's current net income was 2,979. E I du Pont de Nemours & Company's current cash flow from operations was 3,739. ==> 3,739 > 2,979 ==> 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)=Long-Term Debt/Total Assets
=9292/48314
=0.19232521

Gearing (Last Year)=Long-Term Debt/Total Assets
=10765/51349
=0.20964381

E I du Pont de Nemours & Company's gearing of this year was 0.19232521. E I du Pont de Nemours & Company's gearing of last year was 0.20964381. ==> 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)=Total Current Assets/Total Current Liabilities
=21329/11039
=1.93214965

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=23237/11890
=1.95433137

E I du Pont de Nemours & Company's current ratio of this year was 1.93214965. E I du Pont de Nemours & Company's current ratio of last year was 1.95433137. ==> Last year's current ratio is higher ==> Score 0.

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.

E I du Pont de Nemours & Company's number of shares in issue this year was 925.6. E I du Pont de Nemours & Company's number of shares in issue last year was 929.5. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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)=Gross Profit/Revenue
=13603/35900
=0.37891365

Gross Margin (Last Year)=Gross Profit/Revenue
=13403/35411
=0.37849821

E I du Pont de Nemours & Company's gross margin of this year was 0.37891365. E I du Pont de Nemours & Company's gross margin of last year was 0.37849821. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Jun13)
=35900/51349
=0.69913728

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=35411/50031
=0.70778118

E I du Pont de Nemours & Company's asset turnover of this year was 0.69913728. E I du Pont de Nemours & Company's asset turnover of last year was 0.70778118. ==> 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+0+1+1+0
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

E I du Pont de Nemours & Company 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.

E I du Pont de Nemours & Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1110001101
Q4 1111111110
Q5 0011000111
Q6 1000111001
Q7 1111100001
Q8 1100111010
Q9 0111101100
F-score 7776757656

E I du Pont de Nemours & Company Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 0000111100
Q4 1111000011
Q5 1111111111
Q6 0000111100
Q7 0110111111
Q8 1111111101
Q9 1000000000
F-score 6665777756
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