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Equal Energy Ltd (NYSE:EQU)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

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

Equal Energy Ltd has an F-score of 7 indicating the company's financial situation is typical for a stable company.

EQU' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 7

2
8

During the past 13 years, the highest Piotroski F-Score of Equal Energy Ltd 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 4.746 + -0.867 + 2.647 + 5.758 = $12.28 Mil.
Cash Flow from Operations was 7.933 + 8.006 + 6.995 + 8.243 = $31.18 Mil.
Revenue was 18.329 + 16.592 + 15.382 + 20.084 = $70.39 Mil.
Gross Profit was 13.877 + 12.012 + 10.99 + 15.27 = $52.15 Mil.
Average Total Assets from the begining of this year (Mar13)
to the end of this year (Mar14) was
(226.947 + 229.631 + 228.69 + 228.385 + 227.491) / 5 = $228.23 Mil.
Total Assets as of Mar13 was $226.95 Mil.
Long-Term Debt was $40.71 Mil.
Total Current Assets was $33.43 Mil.
Total Current Liabilities was $12.36 Mil.
Net Income was 0.164 + 42.19 + 15.881 + 1.532 = $59.77 Mil.

Revenue was 18.846 + 11.858 + 15.092 + 11.534 = $57.33 Mil.
Gross Profit was 12.906 + 5.182 + 10.469 + 7.153 = $35.71 Mil.
Average Total Assets from the begining of last year (Mar12)
to the end of last year (Mar13) was
(442.166 + 0 + 0 + 227.521 + 226.947) / 5 = $179.33 Mil.
Total Assets as of Mar12 was $442.17 Mil.
Long-Term Debt was $44.29 Mil.
Total Current Assets was $37.81 Mil.
Total Current Liabilities was $15.22 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.

Equal Energy Ltd's current net income (ttm) was 12.28. ==> 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.

Equal Energy Ltd's current cash flow from operations (ttm) was 31.18. ==> 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 (Mar13)
=12.284/226.947
=0.05412718

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Mar12)
=59.767/442.166
=0.13516869

Equal Energy Ltd's return on assets of this year was 0.05412718. Equal Energy Ltd's return on assets of last year was 0.13516869. ==> 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.

Equal Energy Ltd's current net income (ttm) was 12.28. Equal Energy Ltd's current cash flow from operations (ttm) was 31.18. ==> 31.18 > 12.28 ==> 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: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=40.707/228.2288
=0.17836049

Gearing (Last Year: Mar13)=Long-Term Debt/Average Total Assets from Mar12 to Mar13
=44.294/179.3268
=0.24700156

Equal Energy Ltd's gearing of this year was 0.17836049. Equal Energy Ltd's gearing of last year was 0.24700156. ==> 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: Mar14)=Total Current Assets/Total Current Liabilities
=33.426/12.36
=2.70436893

Current Ratio (Last Year: Mar13)=Total Current Assets/Total Current Liabilities
=37.812/15.219
=2.48452592

Equal Energy Ltd's current ratio of this year was 2.70436893. Equal Energy Ltd's current ratio of last year was 2.48452592. ==> This year's current ratio is higher. ==> Score 1.

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.

Equal Energy Ltd's number of shares in issue this year was 41.8. Equal Energy Ltd's number of shares in issue last year was 36.3. ==> 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: TTM)=Gross Profit/Revenue
=52.149/70.387
=0.74088965

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=35.71/57.33
=0.62288505

Equal Energy Ltd's gross margin of this year was 0.74088965. Equal Energy Ltd's gross margin of last year was 0.62288505. ==> 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 (Mar13)
=70.387/226.947
=0.3101473

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Mar12)
=57.33/442.166
=0.12965719

Equal Energy Ltd's asset turnover of this year was 0.3101473. Equal Energy Ltd's asset turnover of last year was 0.12965719. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+1+0+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Equal Energy Ltd has an F-score of 7 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.

Equal Energy Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1100100111
Q2 1111111111
Q3 1000100110
Q4 1111111101
Q5 1100101010
Q6 1000110110
Q7 0000010001
Q8 0110101101
Q9 1000101011
F-score 7532845666

Equal Energy Ltd Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 111111
Q2 111111
Q3 111100
Q4 110011
Q5 011111
Q6 111101
Q7 000010
Q8 110011
Q9 000011
F-score 6700555677
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