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Genuine Parts Co (NYSE:GPC)
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

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

GPC' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 9
Current: 5

2
9

During the past 13 years, the highest Piotroski F-Score of Genuine Parts Co 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 (Sep15) TTM:Last Year (Sep14) TTM:
Net Income was 165.559 + 161.01 + 195.373 + 188.016 = $710 Mil.
Cash Flow from Operations was 200.822 + 122.512 + 331.596 + 441.879 = $1,097 Mil.
Revenue was 3822.454 + 3736.051 + 3940.401 + 3921.802 = $15,421 Mil.
Gross Profit was 1146.541 + 1112.819 + 1178.33 + 1169.225 = $4,607 Mil.
Average Total Assets from the begining of this year (Sep14)
to the end of this year (Sep15) was
(8341.457 + 8246.238 + 8238.355 + 8413.633 + 8203.128) / 5 = $8288.5622 Mil.
Total Assets at the begining of this year (Sep14) was $8,341 Mil.
Long-Term Debt was $500 Mil.
Total Current Assets was $5,623 Mil.
Total Current Liabilities was $3,764 Mil.
Net Income was 150.467 + 157.484 + 197.727 + 190.516 = $696 Mil.

Revenue was 3517.801 + 3624.897 + 3908.387 + 3985.909 = $15,037 Mil.
Gross Profit was 1092.141 + 1084.63 + 1179.168 + 1183.422 = $4,539 Mil.
Average Total Assets from the begining of last year (Sep13)
to the end of last year (Sep14) was
(7943.903 + 7680.297 + 7982.374 + 8251.548 + 8341.457) / 5 = $8039.9158 Mil.
Total Assets at the begining of last year (Sep13) was $7,944 Mil.
Long-Term Debt was $500 Mil.
Total Current Assets was $5,585 Mil.
Total Current Liabilities was $3,636 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.

Genuine Parts Co's current net income (TTM) was 710. ==> 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.

Genuine Parts Co's current cash flow from operations (TTM) was 1,097. ==> 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 (Sep14)
=709.958/8341.457
=0.08511199

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=696.194/7943.903
=0.08763878

Genuine Parts Co's return on assets of this year was 0.08511199. Genuine Parts Co's return on assets of last year was 0.08763878. ==> 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.

Genuine Parts Co's current net income (TTM) was 710. Genuine Parts Co's current cash flow from operations (TTM) was 1,097. ==> 1,097 > 710 ==> 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: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=500/8288.5622
=0.06032409

Gearing (Last Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=500/8039.9158
=0.06218971

Genuine Parts Co's gearing of this year was 0.06032409. Genuine Parts Co's gearing of last year was 0.06218971. ==> 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: Sep15)=Total Current Assets/Total Current Liabilities
=5623.482/3764.068
=1.49399054

Current Ratio (Last Year: Sep14)=Total Current Assets/Total Current Liabilities
=5585.377/3635.782
=1.53622439

Genuine Parts Co's current ratio of this year was 1.49399054. Genuine Parts Co's current ratio of last year was 1.53622439. ==> 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.

Genuine Parts Co's number of shares in issue this year was 152.1. Genuine Parts Co's number of shares in issue last year was 154.1. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=4606.915/15420.708
=0.2987486

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=4539.361/15036.994
=0.30187955

Genuine Parts Co's gross margin of this year was 0.2987486. Genuine Parts Co's gross margin of last year was 0.30187955. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Sep14)
=15420.708/8341.457
=1.84868279

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=15036.994/7943.903
=1.89289748

Genuine Parts Co's asset turnover of this year was 1.84868279. Genuine Parts Co's asset turnover of last year was 1.89289748. ==> 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+1+0+0
=5

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

Genuine Parts Co 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 Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1110011100
Question 4 1011111111
Question 5 1110110101
Question 6 0101001000
Question 7 1111111111
Question 8 1101100110
Question 9 0010011000
F-score 7776677755

Genuine Parts Co Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
Question 1 1111111111
Question 2 1111111111
Question 3 1100000000
Question 4 1111111111
Question 5 1100001111
Question 6 0000110000
Question 7 1111111111
Question 8 1111110000
Question 9 0000000000
F-score 7755665555
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