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FMC Corp (NYSE:FMC)
Piotroski F-Score
5 (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

FMC Corp has an F-score of 5 indicating the company's financial situation is typical for a stable company.

FMC' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 9
Current: 5

4
9

During the past 13 years, the highest Piotroski F-Score of FMC Corp was 9. The lowest was 4. 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 local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was 48.3 + 65.2 + 79.7 + 15.9 = $209 Mil.
Cash Flow from Operations was 100.3 + 124.2 + 163.3 + 110 = $498 Mil.
Revenue was 798.8 + 810.3 + 807.7 + 865.6 = $3,282 Mil.
Gross Profit was 281.4 + 301.3 + 279.5 + 337.6 = $1,200 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(6325.9 + 6390.4 + 6282.2 + 6209.8 + 6139.3) / 5 = $6269.52 Mil.
Total Assets at the begining of this year (Dec15) was $6,326 Mil.
Long-Term Debt was $1,799 Mil.
Total Current Assets was $2,849 Mil.
Total Current Liabilities was $1,438 Mil.
Net Income was -46.8 + 742.3 + -2.4 + -204.1 = $489 Mil.

Revenue was 659.4 + 887.1 + 830.7 + 899.3 = $3,277 Mil.
Gross Profit was 250.7 + 305.8 + 220.3 + 298.6 = $1,075 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(5326 + 5311.7 + 7075.2 + 6447 + 6325.9) / 5 = $6097.16 Mil.
Total Assets at the begining of last year (Dec14) was $5,326 Mil.
Long-Term Debt was $2,036 Mil.
Total Current Assets was $2,972 Mil.
Total Current Liabilities was $1,453 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.

FMC Corp's current net income (TTM) was 209. ==> 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.

FMC Corp's current cash flow from operations (TTM) was 498. ==> 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 (Dec15)
=209.1/6325.9
=0.03305459

FMC Corp's return on assets of this year was 0.03305459. FMC Corp's return on assets of last year was 0.09181374. ==> 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.

FMC Corp's current net income (TTM) was 209. FMC Corp's current cash flow from operations (TTM) was 498. ==> 498 > 209 ==> 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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=1798.8/6269.52
=0.28691192

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=2036.3/6097.16
=0.33397516

FMC Corp's gearing of this year was 0.28691192. FMC Corp's gearing of last year was 0.33397516. ==> This year is lower or equal to last year. ==> Score 1.

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: Dec16)=Total Current Assets/Total Current Liabilities
=2849.2/1438.2
=1.98108747

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=2971.9/1453.3
=2.04493222

FMC Corp's current ratio of this year was 1.98108747. FMC Corp's current ratio of last year was 2.04493222. ==> 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.

FMC Corp's number of shares in issue this year was 134.5. FMC Corp's number of shares in issue last year was 133.7. ==> 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
=1199.8/3282.4
=0.36552523

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1075.4/3276.5
=0.32821608

FMC Corp's gross margin of this year was 0.36552523. FMC Corp's gross margin of last year was 0.32821608. ==> 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 (Dec15)
=3282.4/6325.9
=0.51888269

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=3276.5/5326
=0.61518964

FMC Corp's asset turnover of this year was 0.51888269. FMC Corp's asset turnover of last year was 0.61518964. ==> 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+1+0+0+1+0
=5

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

FMC Corp has an F-score of 5 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 local exchange's currency.

FMC Corp Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 1111111111
Question 2 1111111101
Question 3 1100110010
Question 4 1111101101
Question 5 1011000101
Question 6 1110100110
Question 7 1111111110
Question 8 1101111001
Question 9 1101010000
F-score 9867765645

FMC Corp Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111111001
Question 2 1111001111
Question 3 0001111000
Question 4 0100000111
Question 5 0110000111
Question 6 1111111100
Question 7 1110010000
Question 8 1000000011
Question 9 0000101000
F-score 5654445445
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