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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: 5   Max: 8
Current: 6

5
8

During the past 13 years, the highest Piotroski F-Score of E.I. du Pont de Nemours & Company was 8. The lowest was 5. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 185 + 285 + 1030 + 3348 = $4,848 Mil.
Cash Flow from Operations was 5512 + 298 + 36 + -2667 = $3,179 Mil.
Revenue was 7836 + 7805 + 10003 + 10500 = $36,144 Mil.
Gross Profit was 2703 + 2640 + 3946 + 3395 = $12,684 Mil.
Total Assets at the begining of this year (Dec12) was $49,859 Mil.
Total Assets was $51,499 Mil.
Long-Term Debt was $10,741 Mil.
Total Current Assets was $24,384 Mil.
Total Current Liabilities was $13,367 Mil.
Net Income was 92 + 5 + 1166 + 1492 = $2,755 Mil.

Revenue was 7572 + 7336 + 10208 + 10194 = $35,310 Mil.
Gross Profit was 2592 + 2557 + 4364 + 3378 = $12,891 Mil.
Total Assets at the begining of last year (Dec11) was $48,492 Mil.
Total Assets was $49,859 Mil.
Long-Term Debt was $10,465 Mil.
Total Current Assets was $21,317 Mil.
Total Current Liabilities was $13,552 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 4,848. ==> 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 3,179. ==> 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 (Dec12)
=4848/49859
=0.0972342

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=2755/48492
=0.0568135

E.I. du Pont de Nemours & Company's return on assets of this year was 0.0972342. E.I. du Pont de Nemours & Company's return on assets of last year was 0.0568135. ==> This year is higher. ==> Score 1.

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 4,848. E.I. du Pont de Nemours & Company's current cash flow from operations was 3,179. ==> 3,179 =< 4,848 ==> CFROA =< ROA ==> Score 0.

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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=10741/51499
=0.20856716

Gearing (Last Year)=Long-Term Debt/Total Assets
=10465/49859
=0.2098919

E.I. du Pont de Nemours & Company's gearing of this year was 0.20856716. E.I. du Pont de Nemours & Company's gearing of last year was 0.2098919. ==> This year is lower. ==> 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
=24384/13367
=1.82419391

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=21317/13552
=1.57297816

E.I. du Pont de Nemours & Company's current ratio of this year was 1.82419391. E.I. du Pont de Nemours & Company's current ratio of last year was 1.57297816. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

E.I. du Pont de Nemours & Company's number of shares in issue this year was 935. E.I. du Pont de Nemours & Company's number of shares in issue last year was 941.2. ==> There is the same number of shares in issue this year, or fewer. ==> 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
=12684/36144
=0.35092961

Gross Margin (Last Year)=Gross Profit/Revenue
=12891/35310
=0.36508071

E.I. du Pont de Nemours & Company's gross margin of this year was 0.35092961. E.I. du Pont de Nemours & Company's gross margin of last year was 0.36508071. ==> Last year's gross margin is higher ==> Score 0.

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 (Dec12)
=36144/49859
=0.72492429

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=35310/48492
=0.72816135

E.I. du Pont de Nemours & Company's asset turnover of this year was 0.72492429. E.I. du Pont de Nemours & Company's asset turnover of last year was 0.72816135. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+0+1+1+1+0+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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1100001111
Q4 1111110000
Q5 0111111111
Q6 0000001111
Q7 0101101111
Q8 0011111110
Q9 0110000000
F-score 4766657776
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