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Focus Media Holding, Ltd. (NAS:FMCN)
Piotroski F-Score
0 (As of Today)

The zones of discrimination were as such:

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

Focus Media Holding, Ltd. has an F-score of 7 indicating the company's financial situation is typical for a stable company.

FMCN' s 10-Year Piotroski F-Score Range
Min: 0   Max: 0
Current: 0


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 (Dec12) TTM:Last Year (Dec11) TTM:
Net Income was 37.911 + 58.907 + 64.59 + 76.672 = $238.1 Mil.
Cash Flow from Operations was 44.833 + 93.057 + 77.915 + 142.445 = $358.3 Mil.
Revenue was 199.598 + 233.004 + 256.277 + 247.846 = $936.7 Mil.
Gross Profit was 118.717 + 148.567 + 173.43 + 168.964 = $609.7 Mil.
Average Total Assets from the begining of this year (Dec11)
to the end of this year (Dec12) was
(1741.437 + 1791.624 + 1838.377 + 1888.395 + 1975.886) / 5 = $1,847.1 Mil.
Total Assets was $1,975.9 Mil.
Long-Term Debt was $200.0 Mil.
Total Current Assets was $1,214.9 Mil.
Total Current Liabilities was $295.7 Mil.
Net Income was 20.549 + 42.804 + 62.229 + 37.092 = $162.7 Mil.

Revenue was 146.575 + 178.962 + 210.662 + 256.417 = $792.6 Mil.
Gross Profit was 80.221 + 111.753 + 135.56 + 175.439 = $503.0 Mil.
Average Total Assets from the begining of last year (Dec10)
to the end of last year (Dec11) was
(1384.16 + 1417.404 + 1484.601 + 1614.689 + 1741.437) / 5 = $1,528.5 Mil.
Total Assets was $1,741.4 Mil.
Long-Term Debt was $71.0 Mil.
Total Current Assets was $1,032.9 Mil.
Total Current Liabilities was $364.4 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Focus Media Holding, Ltd.'s current net income (ttm) was 238.1. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Focus Media Holding, Ltd.'s current cash flow from operations (ttm) was 358.3. ==> 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)/Average Total Assets from Dec11 to Dec12
=238.08/1847.1438
=0.12889089

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Dec10 to Dec11
=162.674/1528.4582
=0.10643013

Focus Media Holding, Ltd.'s return on assets of this year was 0.12889089. Focus Media Holding, Ltd.'s return on assets of last year was 0.10643013. ==> This year is higher. ==> Score 1.

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.

Focus Media Holding, Ltd.'s current net income (ttm) was 238.1. Focus Media Holding, Ltd.'s current cash flow from operations (ttm) was 358.3. ==> 358.3 > 238.1 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Dec12)=Long-Term Debt/Total Assets
=200/1975.886
=0.10122041

Gearing (Last Year: Dec11)=Long-Term Debt/Total Assets
=71/1741.437
=0.04077093

Focus Media Holding, Ltd.'s gearing of this year was 0.10122041. Focus Media Holding, Ltd.'s gearing of last year was 0.04077093. ==> Last year is lower than this year ==> Score 0.

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: Dec12)=Total Current Assets/Total Current Liabilities
=1214.854/295.729
=4.10799752

Current Ratio (Last Year: Dec11)=Total Current Assets/Total Current Liabilities
=1032.883/364.41
=2.83439807

Focus Media Holding, Ltd.'s current ratio of this year was 4.10799752. Focus Media Holding, Ltd.'s current ratio of last year was 2.83439807. ==> 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.

Focus Media Holding, Ltd.'s number of shares in issue this year was 133.1. Focus Media Holding, Ltd.'s number of shares in issue last year was 133.5. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=609.678/936.725
=0.65086125

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=502.973/792.616
=0.63457336

Focus Media Holding, Ltd.'s gross margin of this year was 0.65086125. Focus Media Holding, Ltd.'s gross margin of last year was 0.63457336. ==> 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 average total assets throughout 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)/Average Total Assets from Dec11 to Dec12
=936.725/1847.1438
=0.50712078

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Dec10 to Dec11
=792.616/1528.4582
=0.51857224

Focus Media Holding, Ltd.'s asset turnover of this year was 0.50712078. Focus Media Holding, Ltd.'s asset turnover of last year was 0.51857224. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Focus Media Holding, 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.

Focus Media Holding, Ltd. Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
Q1 11100111
Q2 11111111
Q3 11101101
Q4 01111111
Q5 11111100
Q6 10001101
Q7 00100011
Q8 01001111
Q9 11101010
F-score 67737767

Focus Media Holding, Ltd. Quarterly Data

Sep10Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12Dec12
Q1 1111111111
Q2 1111111111
Q3 1111100001
Q4 1100111111
Q5 1111100000
Q6 1111000001
Q7 0011111111
Q8 1111111111
Q9 1111111110
F-score 7777766667
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