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General Dynamics Corp (NYSE:GD)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, 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

General Dynamics Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

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

3
8

During the past 13 years, the highest Piotroski F-Score of General Dynamics Corp 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 495 + 651 + 640 + 571 = $2,357 Mil.
Cash Flow from Operations was 1556 + 467 + 582 + 501 = $3,106 Mil.
Revenue was 8107 + 7796 + 7911 + 7404 = $31,218 Mil.
Gross Profit was 1463 + 1463 + 1484 + 1354 = $5,764 Mil.
Total Assets at the begining of this year (Dec12) was $34,309 Mil.
Total Assets was $35,448 Mil.
Long-Term Debt was $3,908 Mil.
Total Current Assets was $17,886 Mil.
Total Current Liabilities was $12,194 Mil.
Net Income was -2130 + 600 + 634 + 564 = $-332 Mil.

Revenue was 8078 + 7934 + 7922 + 7579 = $31,513 Mil.
Gross Profit was 798 + 1415 + 1495 + 1395 = $5,103 Mil.
Total Assets at the begining of last year (Dec11) was $34,883 Mil.
Total Assets was $34,309 Mil.
Long-Term Debt was $3,908 Mil.
Total Current Assets was $15,744 Mil.
Total Current Liabilities was $11,620 Mil.

Profitability

Q1. 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.

General Dynamics Corp's current net income was 2,357. ==> Positive ==> Score 1.

Q2. 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.

General Dynamics Corp's current cash flow from operations was 3,106. ==> 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/Total Assets at the beginning of this year (Dec12)
=2357/34309
=0.06869918

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=-332/34883
=-0.00951753

General Dynamics Corp's return on assets of this year was 0.06869918. General Dynamics Corp's return on assets of last year was -0.00951753. ==> 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.

General Dynamics Corp's current net income was 2,357. General Dynamics Corp's current cash flow from operations was 3,106. ==> 3,106 > 2,357 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=3908/35448
=0.11024599

Gearing (Last Year)=Long-Term Debt/Total Assets
=3908/34309
=0.11390597

General Dynamics Corp's gearing of this year was 0.11024599. General Dynamics Corp's gearing of last year was 0.11390597. ==> This year is lower. ==> 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)=Total Current Assets/Total Current Liabilities
=17886/12194
=1.46678694

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=15744/11620
=1.35490534

General Dynamics Corp's current ratio of this year was 1.46678694. General Dynamics Corp's current ratio of last year was 1.35490534. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

General Dynamics Corp's number of shares in issue this year was 354.6. General Dynamics Corp's number of shares in issue last year was 350.9. ==> There is more 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)=Gross Profit/Revenue
=5764/31218
=0.18463707

Gross Margin (Last Year)=Gross Profit/Revenue
=5103/31513
=0.16193317

General Dynamics Corp's gross margin of this year was 0.18463707. General Dynamics Corp's gross margin of last year was 0.16193317. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Dec12)
=31218/34309
=0.90990702

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=31513/34883
=0.90339134

General Dynamics Corp's asset turnover of this year was 0.90990702. General Dynamics Corp's asset turnover of last year was 0.90339134. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+1+0+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

General Dynamics Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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.

General Dynamics Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Mar11Dec11Dec12Dec13
Q1 1111110101
Q2 1111110111
Q3 1101010101
Q4 1111110111
Q5 1110111001
Q6 0010101101
Q7 0001111010
Q8 1111010001
Q9 1100000101
F-score 7766673638

General Dynamics Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111100001
Q2 1111111111
Q3 0000000001
Q4 0111111111
Q5 0000100001
Q6 1110000111
Q7 1111111100
Q8 1000000001
Q9 0000000001
F-score 5554533438
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