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Equifax Inc (NYSE:EFX)
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

Equifax Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

EFX' 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 Equifax Inc 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 76.7 + 83.9 + 92.8 + 92.7 = $346 Mil.
Cash Flow from Operations was 191.9 + 65 + 152.8 + 195.6 = $605 Mil.
Revenue was 578.5 + 584.5 + 613.9 + 613.4 = $2,390 Mil.
Gross Profit was 381.3 + 377.7 + 401.6 + 402.4 = $1,563 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(4390.4 + 4539.9 + 4750.1 + 4766.3 + 4707.1) / 5 = $4,631 Mil.
Total Assets as of Sep13 was $4,390 Mil.
Long-Term Debt was $1,146 Mil.
Total Current Assets was $550 Mil.
Total Current Liabilities was $766 Mil.
Net Income was 46.3 + 101.1 + 90.5 + 83.5 = $321 Mil.

Revenue was 558.1 + 566.5 + 586.9 + 572 = $2,284 Mil.
Gross Profit was 342.3 + 371.4 + 388.7 + 375.2 = $1,478 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(3605.9 + 4511.1 + 4387.2 + 4373.6 + 4390.4) / 5 = $4,254 Mil.
Total Assets as of Sep12 was $3,606 Mil.
Long-Term Debt was $1,428 Mil.
Total Current Assets was $527 Mil.
Total Current Liabilities was $332 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Equifax Inc's current net income (ttm) was 346. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Equifax Inc's current cash flow from operations (ttm) was 605. ==> 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 (TTM)/Beginning of This Year Total Assets (Sep13)
=346.1/4390.4
=0.07883109

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Sep12)
=321.4/3605.9
=0.0891317

Equifax Inc's return on assets of this year was 0.07883109. Equifax Inc's return on assets of last year was 0.0891317. ==> 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 (ttm) was 346. Equifax Inc's current cash flow from operations (ttm) was 605. ==> 605 > 346 ==> 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
=1145.7/4630.76
=0.24741079

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=1427.8/4253.64
=0.33566545

Equifax Inc's gearing of this year was 0.24741079. Equifax Inc's gearing of last year was 0.33566545. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=550.4/766.1
=0.71844407

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=526.5/332.4
=1.58393502

Equifax Inc's current ratio of this year was 0.71844407. Equifax Inc's current ratio of last year was 1.58393502. ==> 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 123.5. Equifax Inc's number of shares in issue last year was 123.9. ==> 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
=1563/2390.3
=0.65389282

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1477.6/2283.5
=0.64707686

Equifax Inc's gross margin of this year was 0.65389282. Equifax Inc's gross margin of last year was 0.64707686. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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)/Beginning of This Year Total Assets (Sep13)
=2390.3/4390.4
=0.54443786

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Sep12)
=2283.5/3605.9
=0.6332677

Equifax Inc's asset turnover of this year was 0.54443786. Equifax Inc's asset turnover of last year was 0.6332677. ==> 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

Equifax Inc 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, Altman Z-Score, Beneish M-Score


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 1010111101
Q6 0101101001
Q7 1110111110
Q8 1110101111
Q9 1101010110
F-score 8866768777

Equifax Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 1111111000
Q4 1111111111
Q5 1100001111
Q6 1100001000
Q7 1100000001
Q8 1111111111
Q9 1111110000
F-score 9966667556
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