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Freeport-McMoRan Inc (NYSE:FCX)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

Freeport-McMoRan Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.

FCX' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 4

2
9

During the past 13 years, the highest Piotroski F-Score of Freeport-McMoRan Inc was 9. The lowest was 2. 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 821 + 707 + 510 + 482 = $2,520 Mil.
Cash Flow from Operations was 1878 + 2396 + 1237 + 1350 = $6,861 Mil.
Revenue was 6165 + 5885 + 4985 + 5522 = $22,557 Mil.
Gross Profit was 1914 + 1930 + 1282 + 1427 = $6,553 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(63157 + 62598 + 63473 + 63879 + 64009) / 5 = $63,423 Mil.
Total Assets as of Jun13 was $63,157 Mil.
Long-Term Debt was $17,512 Mil.
Total Current Assets was $10,254 Mil.
Total Current Liabilities was $7,558 Mil.
Net Income was 824 + 743 + 648 + 485 = $2,700 Mil.

Revenue was 4417 + 4513 + 4583 + 4288 = $17,801 Mil.
Gross Profit was 1527 + 1450 + 1535 + 905 = $5,417 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(33689 + 34517 + 35440 + 42588 + 63157) / 5 = $41,878 Mil.
Total Assets as of Jun12 was $33,689 Mil.
Long-Term Debt was $21,142 Mil.
Total Current Assets was $10,578 Mil.
Total Current Liabilities was $5,610 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.

Freeport-McMoRan Inc's current net income (ttm) was 2,520. ==> 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.

Freeport-McMoRan Inc's current cash flow from operations (ttm) was 6,861. ==> 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 (Jun13)
=2520/63157
=0.03990057

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Jun12)
=2700/33689
=0.08014485

Freeport-McMoRan Inc's return on assets of this year was 0.03990057. Freeport-McMoRan Inc's return on assets of last year was 0.08014485. ==> 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.

Freeport-McMoRan Inc's current net income (ttm) was 2,520. Freeport-McMoRan Inc's current cash flow from operations (ttm) was 6,861. ==> 6,861 > 2,520 ==> 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: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=17512/63423.2
=0.27611347

Gearing (Last Year: Jun13)=Long-Term Debt/Average Total Assets from Jun12 to Jun13
=21142/41878.2
=0.504845

Freeport-McMoRan Inc's gearing of this year was 0.27611347. Freeport-McMoRan Inc's gearing of last year was 0.504845. ==> 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: Jun14)=Total Current Assets/Total Current Liabilities
=10254/7558
=1.35670812

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=10578/5610
=1.8855615

Freeport-McMoRan Inc's current ratio of this year was 1.35670812. Freeport-McMoRan Inc's current ratio of last year was 1.8855615. ==> 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.

Freeport-McMoRan Inc's number of shares in issue this year was 1045. Freeport-McMoRan Inc's number of shares in issue last year was 984. ==> 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
=6553/22557
=0.29050849

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=5417/17801
=0.30430875

Freeport-McMoRan Inc's gross margin of this year was 0.29050849. Freeport-McMoRan Inc's gross margin of last year was 0.30430875. ==> Last year's gross margin is higher ==> Score 0.

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 (Jun13)
=22557/63157
=0.35715756

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Jun12)
=17801/33689
=0.52839206

Freeport-McMoRan Inc's asset turnover of this year was 0.35715756. Freeport-McMoRan Inc's asset turnover of last year was 0.52839206. ==> 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+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

Freeport-McMoRan Inc 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, 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.

Freeport-McMoRan Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111011111
Q2 1111111111
Q3 0111011000
Q4 1111111111
Q5 1110101110
Q6 1010111100
Q7 0000100010
Q8 0100011000
Q9 0111011001
F-score 5775578554

Freeport-McMoRan Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 0000000000
Q4 1111111111
Q5 1110000011
Q6 1001000000
Q7 1101000000
Q8 0000000000
Q9 0000011000
F-score 6545344340
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