Switch to:
Discovery Communications Inc (NAS:DISCK)
Piotroski F-Score
5 (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

Discovery Communications Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

DISCK' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 5

2
8

During the past 13 years, the highest Piotroski F-Score of Discovery Communications Inc was 8. The lowest was 2. And the median was 5.


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 230 + 379 + 280 + 250 = $1,139 Mil.
Cash Flow from Operations was 241 + 232 + 420 + 425 = $1,318 Mil.
Revenue was 1411 + 1610 + 1568 + 1676 = $6,265 Mil.
Gross Profit was 929 + 1095 + 1039 + 1078 = $4,141 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(14979 + 15311 + 16105 + 16373 + 16014) / 5 = $15756.4 Mil.
Total Assets at the begining of this year (Dec13) was $14,979 Mil.
Long-Term Debt was $6,046 Mil.
Total Current Assets was $2,491 Mil.
Total Current Liabilities was $2,604 Mil.
Net Income was 231 + 300 + 255 + 289 = $1,075 Mil.

Revenue was 1156 + 1467 + 1375 + 1537 = $5,535 Mil.
Gross Profit was 814 + 1030 + 940 + 1062 = $3,846 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(12930 + 14421 + 14687 + 14867 + 14979) / 5 = $14376.8 Mil.
Total Assets at the begining of last year (Dec12) was $12,930 Mil.
Long-Term Debt was $6,482 Mil.
Total Current Assets was $2,410 Mil.
Total Current Liabilities was $1,294 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.

Discovery Communications Inc's current net income (TTM) was 1,139. ==> 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.

Discovery Communications Inc's current cash flow from operations (TTM) was 1,318. ==> 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.

Discovery Communications Inc's return on assets of this year was 0.07603979. Discovery Communications Inc's return on assets of last year was 0.08313998. ==> Last year is higher ==> Score 0.

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.

Discovery Communications Inc's current net income (TTM) was 1,139. Discovery Communications Inc's current cash flow from operations (TTM) was 1,318. ==> 1,318 > 1,139 ==> CFROA > ROA ==> Score 1.

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: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=6046/15756.4
=0.38371709

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=6482/14376.8
=0.45086528

Discovery Communications Inc's gearing of this year was 0.38371709. Discovery Communications Inc's gearing of last year was 0.45086528. ==> This year is lower or equal to last year. ==> Score 1.

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: Dec14)=Total Current Assets/Total Current Liabilities
=2491/2604
=0.95660522

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=2410/1294
=1.86244204

Discovery Communications Inc's current ratio of this year was 0.95660522. Discovery Communications Inc's current ratio of last year was 1.86244204. ==> Last year's current ratio is higher ==> Score 0.

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.

Discovery Communications Inc's number of shares in issue this year was 669. Discovery Communications Inc's number of shares in issue last year was 707. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=4141/6265
=0.66097366

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3846/5535
=0.69485095

Discovery Communications Inc's gross margin of this year was 0.66097366. Discovery Communications Inc's gross margin of last year was 0.69485095. ==> Last year's gross margin is higher ==> Score 0.

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 (Dec13)
=6265/14979
=0.41825222

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=5535/12930
=0.42807425

Discovery Communications Inc's asset turnover of this year was 0.41825222. Discovery Communications Inc's asset turnover of last year was 0.42807425. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+1+1+0+1+0+0
=5

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

Discovery Communications Inc has an F-score of 5 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.

Discovery Communications Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1001111111
Question 2 1111111111
Question 3 0001011010
Question 4 1111110111
Question 5 1110100001
Question 6 1010111000
Question 7 0010001101
Question 8 0001010100
Question 9 1001011010
F-score 6356576555

Discovery Communications Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1000010100
Question 4 1111111111
Question 5 0000001111
Question 6 1010000000
Question 7 1111001111
Question 8 1110000000
Question 9 1001111110
F-score 8565566765
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK