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Genuine Parts Company (NYSE:GPC)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

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

GPC' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 5

2
9

During the past 13 years, the highest Piotroski F-Score of Genuine Parts Company 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 150.467 + 173.746 + 216.357 + 144.389 = $685 Mil.
Cash Flow from Operations was 219.246 + 370.407 + 350.7 + 116.378 = $1,057 Mil.
Revenue was 3517.801 + 3685.243 + 3675.997 + 3198.802 = $14,078 Mil.
Gross Profit was 1092.141 + 1100.923 + 1105.108 + 921.748 = $4,220 Mil.
Total Assets at the begining of this year (Dec12) was $6,807 Mil.
Total Assets was $7,680 Mil.
Long-Term Debt was $500 Mil.
Total Current Assets was $5,221 Mil.
Total Current Liabilities was $3,183 Mil.
Net Income was 160.225 + 172.943 + 168.618 + 146.255 = $648 Mil.

Revenue was 3118.966 + 3375.778 + 3337.836 + 3181.288 = $13,014 Mil.
Gross Profit was 910.658 + 976.036 + 972.286 + 919.111 = $3,778 Mil.
Total Assets at the begining of last year (Dec11) was $6,203 Mil.
Total Assets was $6,807 Mil.
Long-Term Debt was $250 Mil.
Total Current Assets was $4,820 Mil.
Total Current Liabilities was $2,488 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.

Genuine Parts Company's current net income was 685. ==> 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.

Genuine Parts Company's current cash flow from operations was 1,057. ==> 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)
=684.959/6807.061
=0.10062478

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=648.041/6202.774
=0.104476

Genuine Parts Company's return on assets of this year was 0.10062478. Genuine Parts Company's return on assets of last year was 0.104476. ==> 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.

Genuine Parts Company's current net income was 685. Genuine Parts Company's current cash flow from operations was 1,057. ==> 1,057 > 685 ==> 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
=500/7680.297
=0.06510165

Gearing (Last Year)=Long-Term Debt/Total Assets
=250/6807.061
=0.03672657

Genuine Parts Company's gearing of this year was 0.06510165. Genuine Parts Company's gearing of last year was 0.03672657. ==> Last year is lower ==> 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)=Total Current Assets/Total Current Liabilities
=5221.491/3183.044
=1.64040805

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=4820.131/2487.638
=1.93763361

Genuine Parts Company's current ratio of this year was 1.64040805. Genuine Parts Company's current ratio of last year was 1.93763361. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Genuine Parts Company's number of shares in issue this year was 155.1. Genuine Parts Company's number of shares in issue last year was 155.9. ==> There is the same number of shares in issue this year, or fewer. ==> 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)=Gross Profit/Revenue
=4219.92/14077.843
=0.29975615

Gross Margin (Last Year)=Gross Profit/Revenue
=3778.091/13013.868
=0.29031269

Genuine Parts Company's gross margin of this year was 0.29975615. Genuine Parts Company's gross margin of last year was 0.29031269. ==> 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)
=14077.843/6807.061
=2.06812353

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=13013.868/6202.774
=2.09807225

Genuine Parts Company's asset turnover of this year was 2.06812353. Genuine Parts Company's asset turnover of last year was 2.09807225. ==> 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+0+0+1+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Genuine Parts Company 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 own currency.

Genuine Parts Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1111001110
Q4 1101111111
Q5 1101011010
Q6 0010100100
Q7 0111111111
Q8 1110110011
Q9 1001001100
F-score 7767667775

Genuine Parts Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1111111110
Q4 1111111111
Q5 1000011110
Q6 0111100000
Q7 1111111111
Q8 0011110111
Q9 1110000000
F-score 7787776775
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