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Enterprise Products Partners LP (NYSE:EPD)
Piotroski F-Score
4 (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

Enterprise Products Partners LP has an F-score of 4 indicating the company's financial situation is typical for a stable company.

EPD' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 4

3
9

During the past 13 years, the highest Piotroski F-Score of Enterprise Products Partners LP was 9. The lowest was 3. 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 (Mar15) TTM:Last Year (Mar14) TTM:
Net Income was 637.7 + 691.1 + 659.8 + 636.1 = $2,625 Mil.
Cash Flow from Operations was 467.8 + 832.5 + 1457.8 + 954 = $3,712 Mil.
Revenue was 12520.8 + 12330.2 + 10190.3 + 7472.5 = $42,514 Mil.
Gross Profit was 881.7 + 915.4 + 904.2 + 856.1 = $3,557 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(40990.5 + 41571.3 + 42905.5 + 47100.7 + 46505.3) / 5 = $43814.66 Mil.
Total Assets at the begining of this year (Mar14) was $40,991 Mil.
Long-Term Debt was $20,192 Mil.
Total Current Assets was $4,435 Mil.
Total Current Liabilities was $5,876 Mil.
Net Income was 552.5 + 592 + 698.9 + 798.8 = $2,642 Mil.

Revenue was 11149.3 + 12093.3 + 13101.3 + 12909.9 = $49,254 Mil.
Gross Profit was 782.1 + 819.8 + 923.7 + 1029.4 = $3,555 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(38101.4 + 37876.9 + 40125 + 40138.7 + 40990.5) / 5 = $39446.5 Mil.
Total Assets at the begining of last year (Mar13) was $38,101 Mil.
Long-Term Debt was $17,468 Mil.
Total Current Assets was $7,333 Mil.
Total Current Liabilities was $7,622 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.

Enterprise Products Partners LP's current net income (TTM) was 2,625. ==> 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.

Enterprise Products Partners LP's current cash flow from operations (TTM) was 3,712. ==> 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.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Mar14)
=2624.7/40990.5
=0.06403191

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=2642.2/38101.4
=0.06934653

Enterprise Products Partners LP's return on assets of this year was 0.06403191. Enterprise Products Partners LP's return on assets of last year was 0.06934653. ==> 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.

Enterprise Products Partners LP's current net income (TTM) was 2,625. Enterprise Products Partners LP's current cash flow from operations (TTM) was 3,712. ==> 3,712 > 2,625 ==> 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: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=20192.2/43814.66
=0.46085488

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=17467.8/39446.5
=0.44282256

Enterprise Products Partners LP's gearing of this year was 0.46085488. Enterprise Products Partners LP's gearing of last year was 0.44282256. ==> Last year is lower than this year ==> Score 0.

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: Mar15)=Total Current Assets/Total Current Liabilities
=4434.8/5875.9
=0.75474395

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=7333.2/7622
=0.96210968

Enterprise Products Partners LP's current ratio of this year was 0.75474395. Enterprise Products Partners LP's current ratio of last year was 0.96210968. ==> 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.

Enterprise Products Partners LP's number of shares in issue this year was 1966.7. Enterprise Products Partners LP's number of shares in issue last year was 1875.9. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=3557.4/42513.8
=0.08367636

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3555/49253.8
=0.07217717

Enterprise Products Partners LP's gross margin of this year was 0.08367636. Enterprise Products Partners LP's gross margin of last year was 0.07217717. ==> This year's gross margin is higher. ==> Score 1.

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 (Mar14)
=42513.8/40990.5
=1.03716227

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=49253.8/38101.4
=1.29270316

Enterprise Products Partners LP's asset turnover of this year was 1.03716227. Enterprise Products Partners LP's asset turnover of last year was 1.29270316. ==> 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+0+0+0+1+0
=4

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

Enterprise Products Partners LP has an F-score of 4 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.

Enterprise Products Partners LP Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 0101011110
Question 4 1111111111
Question 5 1100111110
Question 6 1001010010
Question 7 0001100000
Question 8 1100101001
Question 9 0111011010
F-score 6747677574

Enterprise Products Partners LP Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 1111111111
Question 3 1110100000
Question 4 1111111111
Question 5 1000111100
Question 6 0111100100
Question 7 0000000000
Question 8 0000000011
Question 9 0001111000
F-score 5555755544
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