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Dean Foods Co (NYSE:DF)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Dean Foods Co has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

DF' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 3

2
8

During the past 13 years, the highest Piotroski F-Score of Dean Foods Co was 8. The lowest was 2. 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was -37.677 + -8.956 + -0.645 + -15.972 = $-63 Mil.
Cash Flow from Operations was -72.187 + 32.799 + -7.531 + 22.803 = $-24 Mil.
Revenue was 2295.45 + 2341.04 + 2393.869 + 2373.28 = $9,404 Mil.
Gross Profit was 445.77 + 416.175 + 399.088 + 416.8 = $1,678 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(3048.638 + 2802.045 + 2863.442 + 2803.322 + 2789.89) / 5 = $2861.4674 Mil.
Total Assets at the begining of this year (Sep13) was $3,049 Mil.
Long-Term Debt was $978 Mil.
Total Current Assets was $1,214 Mil.
Total Current Liabilities was $788 Mil.
Net Income was 28.133 + 492.605 + -56.87 + 415.12 = $879 Mil.

Revenue was 2455.13 + 2292.43 + 2227.542 + 2200.899 = $9,176 Mil.
Gross Profit was 515.803 + 495.232 + 472.3 + 441.285 = $1,925 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(5649.96 + 5697.583 + 5013.134 + 3321.317 + 3048.638) / 5 = $4546.1264 Mil.
Total Assets at the begining of last year (Sep12) was $5,650 Mil.
Long-Term Debt was $1,032 Mil.
Total Current Assets was $1,425 Mil.
Total Current Liabilities was $876 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.

Dean Foods Co's current net income (TTM) was -63. ==> Negative ==> Score 0.

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.

Dean Foods Co's current cash flow from operations (TTM) was -24. ==> Negative ==> Score 0.

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 (Sep13)
=-63.25/3048.638
=-0.02074697

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=878.988/5649.96
=0.1555742

Dean Foods Co's return on assets of this year was -0.02074697. Dean Foods Co's return on assets of last year was 0.1555742. ==> 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.

Dean Foods Co's current net income (TTM) was -63. Dean Foods Co's current cash flow from operations (TTM) was -24. ==> -24 > -63 ==> 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: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=977.516/2861.4674
=0.34161354

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=1031.643/4546.1264
=0.22692792

Dean Foods Co's gearing of this year was 0.34161354. Dean Foods Co's gearing of last year was 0.22692792. ==> Last year is lower than this year ==> Score 0.

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: Sep14)=Total Current Assets/Total Current Liabilities
=1213.558/787.614
=1.54080298

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=1424.99/875.674
=1.62730651

Dean Foods Co's current ratio of this year was 1.54080298. Dean Foods Co's current ratio of last year was 1.62730651. ==> 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.

Dean Foods Co's number of shares in issue this year was 93.8. Dean Foods Co's number of shares in issue last year was 95.3. ==> 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: TTM)=Gross Profit/Revenue
=1677.833/9403.639
=0.1784238

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1924.62/9176.001
=0.20974496

Dean Foods Co's gross margin of this year was 0.1784238. Dean Foods Co's gross margin of last year was 0.20974496. ==> Last year's gross margin is higher ==> Score 0.

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 (Sep13)
=9403.639/3048.638
=3.08453775

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=9176.001/5649.96
=1.62408247

Dean Foods Co's asset turnover of this year was 3.08453775. Dean Foods Co's asset turnover of last year was 1.62408247. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+0+0+1+0+0+1+0+1
=3

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

Dean Foods Co has an F-score of 3. It is a bad or low score, which usually implies poor business operation.


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.

Dean Foods Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111011
Q2 1111111110
Q3 0100110011
Q4 1111111110
Q5 0010111011
Q6 1001011110
Q7 0111000000
Q8 0110110000
Q9 0011100010
F-score 4676775373

Dean Foods Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 0111111110
Q2 1111000000
Q3 0111111010
Q4 1110000001
Q5 0011111100
Q6 0010110110
Q7 0000000001
Q8 1100000000
Q9 0011110111
F-score 3575553443
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