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Honda Motor Co Ltd (NYSE:HMC)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, 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

Honda Motor Co Ltd has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

HMC' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Honda Motor Co Ltd was 9. 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 1549.05985871 + 1664.17458861 + 1440.06290545 + 1313.54928055 = $5,967 Mil.
Cash Flow from Operations was 1917.82076117 + 3500.88816881 + 3486.05268331 + 2802.02802278 = $11,707 Mil.
Revenue was 29113.915633 + 30229.4208359 + 29371.7220366 + 27907.7706931 = $116,623 Mil.
Gross Profit was 7826.09072773 + 8005.5242148 + 7371.89895813 + 6886.08525323 = $30,090 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(148391.060653 + 149833.935679 + 152472.535088 + 152229.418125 + 152486.410729) / 5 = $151,083 Mil.
Total Assets as of Sep13 was $148,391 Mil.
Long-Term Debt was $31,456 Mil.
Total Current Assets was $54,338 Mil.
Total Current Liabilities was $45,952 Mil.
Net Income was 869.556917964 + 774.893103378 + 1229.00885897 + 1231.13429477 = $4,105 Mil.

Revenue was 27238.3390599 + 28079.1341885 + 28433.9289477 + 29561.4298865 = $113,313 Mil.
Gross Profit was 7020.53717802 + 7103.29589394 + 7120.14286718 + 7562.73908152 = $28,807 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(144882.323162 + 140565.496643 + 139480.72792 + 142448.968126 + 148391.060653) / 5 = $143,154 Mil.
Total Assets as of Sep12 was $144,882 Mil.
Long-Term Debt was $30,893 Mil.
Total Current Assets was $54,456 Mil.
Total Current Liabilities was $43,121 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Honda Motor Co Ltd's current net income (ttm) was 5,967. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Honda Motor Co Ltd's current cash flow from operations (ttm) was 11,707. ==> 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)/Beginning of This Year Total Assets (Sep13)
=5966.84663332/148391.060653
=0.04021028

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Sep12)
=4104.59317508/144882.323162
=0.02833053

Honda Motor Co Ltd's return on assets of this year was 0.04021028. Honda Motor Co Ltd's return on assets of last year was 0.02833053. ==> 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.

Honda Motor Co Ltd's current net income (ttm) was 5,967. Honda Motor Co Ltd's current cash flow from operations (ttm) was 11,707. ==> 11,707 > 5,967 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=31455.6812039/151082.672055
=0.20820178

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=30893.4540248/143153.715301
=0.21580616

Honda Motor Co Ltd's gearing of this year was 0.20820178. Honda Motor Co Ltd's gearing of last year was 0.21580616. ==> This year is lower or equal to last year. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=54338.1617827/45952.0357987
=1.18249738

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=54456.2033344/43120.5277693
=1.26288351

Honda Motor Co Ltd's current ratio of this year was 1.18249738. Honda Motor Co Ltd's current ratio of last year was 1.26288351. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Honda Motor Co Ltd's number of shares in issue this year was 0. Honda Motor Co Ltd's number of shares in issue last year was 0. ==> 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
=30089.5991539/116622.829199
=0.2580078

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=28806.7150207/113312.832083
=0.25422288

Honda Motor Co Ltd's gross margin of this year was 0.2580078. Honda Motor Co Ltd's gross margin of last year was 0.25422288. ==> 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 begining of the year total assets) 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)/Beginning of This Year Total Assets (Sep13)
=116622.829199/148391.060653
=0.78591546

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Sep12)
=113312.832083/144882.323162
=0.78210253

Honda Motor Co Ltd's asset turnover of this year was 0.78591546. Honda Motor Co Ltd's asset turnover of last year was 0.78210253. ==> 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+0+1+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Honda Motor Co Ltd 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, 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.

Honda Motor Co Ltd Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
Q1 1111111111
Q2 1111111111
Q3 0001011011
Q4 1011111111
Q5 1011001000
Q6 0110010100
Q7 1111001111
Q8 0000001011
Q9 0011001001
F-score 5477358567

Honda Motor Co Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 1111001111
Q4 1111111111
Q5 0001000001
Q6 1100001000
Q7 0111111111
Q8 0011000111
Q9 1111000111
F-score 6777667877
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