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Equifax Inc (NYSE:EFX)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

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

EFX' s 10-Year Piotroski F-Score Range
Min: 4   Max: 9
Current: 5

4
9

During the past 13 years, the highest Piotroski F-Score of Equifax Inc was 9. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 92.8 + 83.9 + 76.7 + 83.5 = $337 Mil.
Cash Flow from Operations was 152.8 + 65 + 191.9 + 167.6 = $577 Mil.
Revenue was 613.9 + 584.5 + 578.5 + 572 = $2,349 Mil.
Gross Profit was 401.6 + 377.7 + 381.3 + 375.2 = $1,536 Mil.
Total Assets at the begining of this year (Jun13) was $4,374 Mil.
Total Assets was $4,766 Mil.
Long-Term Debt was $1,146 Mil.
Total Current Assets was $554 Mil.
Total Current Liabilities was $760 Mil.
Net Income was 90.5 + 101.1 + 46.3 + 77.9 = $316 Mil.

Revenue was 586.9 + 566.5 + 558.1 + 543.9 = $2,255 Mil.
Gross Profit was 388.7 + 371.4 + 342.3 + 335.4 = $1,438 Mil.
Total Assets at the begining of last year (Jun12) was $3,521 Mil.
Total Assets was $4,374 Mil.
Long-Term Debt was $1,429 Mil.
Total Current Assets was $513 Mil.
Total Current Liabilities was $376 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.

Equifax Inc's current net income was 337. ==> 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.

Equifax Inc's current cash flow from operations was 577. ==> 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)
=336.9/4373.6
=0.07703036

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=315.8/3521.1
=0.08968788

Equifax Inc's return on assets of this year was 0.07703036. Equifax Inc's return on assets of last year was 0.08968788. ==> 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.

Equifax Inc's current net income was 337. Equifax Inc's current cash flow from operations was 577. ==> 577 > 337 ==> 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
=1145.6/4766.3
=0.24035415

Gearing (Last Year)=Long-Term Debt/Total Assets
=1429.1/4373.6
=0.32675599

Equifax Inc's gearing of this year was 0.24035415. Equifax Inc's gearing of last year was 0.32675599. ==> 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
=554.2/759.8
=0.72940247

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=512.6/375.8
=1.36402342

Equifax Inc's current ratio of this year was 0.72940247. Equifax Inc's current ratio of last year was 1.36402342. ==> 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.

Equifax Inc's number of shares in issue this year was 124.3. Equifax Inc's number of shares in issue last year was 123.6. ==> 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)=Gross Profit/Revenue
=1535.8/2348.9
=0.65383797

Gross Margin (Last Year)=Gross Profit/Revenue
=1437.8/2255.4
=0.63749224

Equifax Inc's gross margin of this year was 0.65383797. Equifax Inc's gross margin of last year was 0.63749224. ==> 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)
=2348.9/4373.6
=0.53706329

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=2255.4/3521.1
=0.64053847

Equifax Inc's asset turnover of this year was 0.53706329. Equifax Inc's asset turnover of last year was 0.64053847. ==> 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+0+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Equifax 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.

Equifax Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1101001011
Q4 1111111111
Q5 1110010101
Q6 0101101001
Q7 1110111110
Q8 1110101111
Q9 1101010110
F-score 8966667777

Equifax Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 0111111100
Q4 1111111111
Q5 1110000111
Q6 1110000100
Q7 1110000000
Q8 1111111111
Q9 1111111000
F-score 8996666755
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