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Gerdau (Gerdau) Piotroski F-Score : 5 (As of Apr. 27, 2024)


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What is Gerdau Piotroski F-Score?

The zones of discrimination were as such:

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

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

The historical rank and industry rank for Gerdau's Piotroski F-Score or its related term are showing as below:

GGB' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Med: 5   Max: 7
Current: 5

During the past 13 years, the highest Piotroski F-Score of Gerdau was 7. The lowest was 4. And the median was 5.


Gerdau Piotroski F-Score Historical Data

The historical data trend for Gerdau's Piotroski F-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Gerdau Piotroski F-Score Chart

Gerdau Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Piotroski F-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 5.00 5.00 7.00 4.00 5.00

Gerdau Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Piotroski F-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.00 5.00 5.00 5.00 5.00

Competitive Comparison of Gerdau's Piotroski F-Score

For the Steel subindustry, Gerdau's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Gerdau's Piotroski F-Score Distribution in the Steel Industry

For the Steel industry and Basic Materials sector, Gerdau's Piotroski F-Score distribution charts can be found below:

* The bar in red indicates where Gerdau's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Dec23) TTM:Last Year (Dec22) TTM:
Net Income was 615.505 + 440.058 + 320.285 + 117.953 = $1,494 Mil.
Cash Flow from Operations was 377.008 + 662.76 + 474.798 + 737.439 = $2,252 Mil.
Revenue was 3623.297 + 3763.185 + 3455.01 + 3003.289 = $13,845 Mil.
Gross Profit was 696.67 + 675.431 + 565.467 + 333.231 = $2,271 Mil.
Average Total Assets from the begining of this year (Dec22)
to the end of this year (Dec23) was
(14069.213 + 14542.604 + 15203.959 + 15471.76 + 15283.306) / 5 = $14914.1684 Mil.
Total Assets at the begining of this year (Dec22) was $14,069 Mil.
Long-Term Debt & Capital Lease Obligation was $2,046 Mil.
Total Current Assets was $5,959 Mil.
Total Current Liabilities was $2,303 Mil.
Net Income was 587.758 + 848.332 + 574.197 + 230.223 = $2,241 Mil.

Revenue was 4085.381 + 4550.279 + 4033.342 + 3424.724 = $16,094 Mil.
Gross Profit was 1041.114 + 1169.628 + 903.55 + 558.254 = $3,673 Mil.
Average Total Assets from the begining of last year (Dec21)
to the end of last year (Dec22) was
(13053.213 + 14375.739 + 15384.593 + 15213.274 + 14069.213) / 5 = $14419.2064 Mil.
Total Assets at the begining of last year (Dec21) was $13,053 Mil.
Long-Term Debt & Capital Lease Obligation was $1,957 Mil.
Total Current Assets was $5,959 Mil.
Total Current Liabilities was $2,567 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

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.

Gerdau's current Net Income (TTM) was 1,494. ==> 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.

Gerdau's current Cash Flow from Operations (TTM) was 2,252. ==> 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/Total Assets (Dec22)
=1493.801/14069.213
=0.10617516

ROA (Last Year)=Net Income/Total Assets (Dec21)
=2240.51/13053.213
=0.17164433

Gerdau's return on assets of this year was 0.10617516. Gerdau's return on assets of last year was 0.17164433. ==> 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.

Gerdau's current Net Income (TTM) was 1,494. Gerdau's current Cash Flow from Operations (TTM) was 2,252. ==> 2,252 > 1,494 ==> 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: Dec23)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Dec22 to Dec23
=2046.028/14914.1684
=0.13718686

Gearing (Last Year: Dec22)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Dec21 to Dec22
=1957.113/14419.2064
=0.13572959

Gerdau's gearing of this year was 0.13718686. Gerdau's gearing of last year was 0.13572959. ==> 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: Dec23)=Total Current Assets/Total Current Liabilities
=5959.006/2303.076
=2.58741179

Current Ratio (Last Year: Dec22)=Total Current Assets/Total Current Liabilities
=5959.016/2566.55
=2.32180008

Gerdau's current ratio of this year was 2.58741179. Gerdau's current ratio of last year was 2.32180008. ==> 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.

Gerdau's number of shares in issue this year was 2112.281. Gerdau's number of shares in issue last year was 1988.813. ==> 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
=2270.799/13844.781
=0.16401841

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3672.546/16093.726
=0.22819737

Gerdau's gross margin of this year was 0.16401841. Gerdau's gross margin of last year was 0.22819737. ==> 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/Total Assets at the Beginning of This Year (Dec22)
=13844.781/14069.213
=0.98404801

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Dec21)
=16093.726/13053.213
=1.23293215

Gerdau's asset turnover of this year was 0.98404801. Gerdau's asset turnover of last year was 1.23293215. ==> 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+0+1+0+0+0
=4

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

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

Gerdau  (NYSE:GGB) Piotroski F-Score 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.


Gerdau Piotroski F-Score Related Terms

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Gerdau (Gerdau) Business Description

Address
Avenida Dra. Ruth Cardoso, 8,501 - 8th Floor, Sao Paulo, SP, BRA, 05425-070
Gerdau SA produces steel and steel products. The company operates in civil construction, agriculture, automotive, iron ore, exports, research and development, and home steel products sectors. It offers products such as nails, rebar, columns, billets, slabs, tribar tutor, mechanical construction bars, reinforced steel locks. The company's geographical segment includes Brazil Operations; North America Operations; South America Operations as well as Special Steel Operations. It derives most of the revenue from the Brazil Operations segment.

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