Switch to:
Esterline Technologies (NYSE:ESL)
Piotroski F-Score
6 (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

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

ESL' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 6

3
8

During the past 13 years, the highest Piotroski F-Score of Esterline Technologies was 8. 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 (Jan15) TTM:Last Year (Jan14) TTM:
Net Income was 36.904 + 38.908 + -3.472 + 8.319 = $81 Mil.
Cash Flow from Operations was 34.529 + 50.263 + 81.649 + 5.196 = $172 Mil.
Revenue was 529.574 + 531.124 + 485.491 + 446.344 = $1,993 Mil.
Gross Profit was 182.345 + 182.473 + 182.511 + 145.35 = $693 Mil.
Average Total Assets from the begining of this year (Jan14)
to the end of this year (Jan15) was
(3270.335 + 3325.414 + 3308.458 + 3193.467 + 3083.39) / 5 = $3236.2128 Mil.
Total Assets at the begining of this year (Jan14) was $3,270 Mil.
Long-Term Debt was $782 Mil.
Total Current Assets was $1,204 Mil.
Total Current Liabilities was $379 Mil.
Net Income was 35.522 + 38.238 + 65.863 + 30.078 = $170 Mil.

Revenue was 499.562 + 478.068 + 453.185 + 485.94 = $1,917 Mil.
Gross Profit was 181.376 + 178.902 + 184.086 + 170.735 = $715 Mil.
Average Total Assets from the begining of last year (Jan13)
to the end of last year (Jan14) was
(3235.404 + 3187.586 + 3224.911 + 3262.112 + 3270.335) / 5 = $3236.0696 Mil.
Total Assets at the begining of last year (Jan13) was $3,235 Mil.
Long-Term Debt was $685 Mil.
Total Current Assets was $1,096 Mil.
Total Current Liabilities was $384 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.

Esterline Technologies's current net income (TTM) was 81. ==> 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.

Esterline Technologies's current cash flow from operations (TTM) was 172. ==> 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 (Jan14)
=80.659/3270.335
=0.02466383

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=169.701/3235.404
=0.05245125

Esterline Technologies's return on assets of this year was 0.02466383. Esterline Technologies's return on assets of last year was 0.05245125. ==> 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.

Esterline Technologies's current net income (TTM) was 81. Esterline Technologies's current cash flow from operations (TTM) was 172. ==> 172 > 81 ==> 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: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=782.041/3236.2128
=0.24165314

Gearing (Last Year: Jan14)=Long-Term Debt/Average Total Assets from Jan13 to Jan14
=685.245/3236.0696
=0.21175224

Esterline Technologies's gearing of this year was 0.24165314. Esterline Technologies's gearing of last year was 0.21175224. ==> 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: Jan15)=Total Current Assets/Total Current Liabilities
=1203.699/379.283
=3.17361706

Current Ratio (Last Year: Jan14)=Total Current Assets/Total Current Liabilities
=1096.351/383.549
=2.8584379

Esterline Technologies's current ratio of this year was 3.17361706. Esterline Technologies's current ratio of last year was 2.8584379. ==> This year's current ratio is higher. ==> Score 1.

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.

Esterline Technologies's number of shares in issue this year was 32.2. Esterline Technologies's number of shares in issue last year was 32.2. ==> 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
=692.679/1992.533
=0.3476374

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=715.099/1916.755
=0.37307794

Esterline Technologies's gross margin of this year was 0.3476374. Esterline Technologies's gross margin of last year was 0.37307794. ==> 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 (Jan14)
=1992.533/3270.335
=0.60927489

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=1916.755/3235.404
=0.59243142

Esterline Technologies's asset turnover of this year was 0.60927489. Esterline Technologies's asset turnover of last year was 0.59243142. ==> This year's asset turnover is higher. ==> Score 1.

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+1+1+0+1
=6

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

Esterline Technologies 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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Esterline Technologies Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
Question 1 1111111111
Question 2 1111111111
Question 3 1010100010
Question 4 1010111111
Question 5 1001010111
Question 6 0111110111
Question 7 0000000000
Question 8 0001011110
Question 9 1010101001
F-score 6365665676

Esterline Technologies Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
Question 1 1111111111
Question 2 1111111111
Question 3 0001111100
Question 4 1111111111
Question 5 1111111110
Question 6 1111111111
Question 7 0000000001
Question 8 1111111000
Question 9 0001001111
F-score 6668778766
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