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

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 7 indicating the company's financial situation is typical for a stable company.

HMC' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 6

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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 1231.13429477 + 1549.05985871 + 1664.17458861 + 1440.06290545 = $5,884 Mil.
Cash Flow from Operations was 3756.89884423 + 1917.82076117 + 3500.88816881 + 3486.05268331 = $12,662 Mil.
Revenue was 29561.4298865 + 29113.915633 + 30229.4208359 + 29371.7220366 = $118,276 Mil.
Gross Profit was 7562.73908152 + 7826.09072773 + 8005.5242148 + 7371.89895813 = $30,766 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(142448.968126 + 148391.060653 + 149833.935679 + 152472.535088 + 152229.418125) / 5 = $149,075 Mil.
Total Assets was $152,229 Mil.
Long-Term Debt was $31,501 Mil.
Total Current Assets was $54,653 Mil.
Total Current Liabilities was $45,133 Mil.
Net Income was 1040.75278752 + 869.556917964 + 774.893103378 + 1229.00885897 = $3,914 Mil.

Revenue was 28745.725387 + 27238.3390599 + 28079.1341885 + 28433.9289477 = $112,497 Mil.
Gross Profit was 7194.39839014 + 7020.53717802 + 7103.29589394 + 7120.14286718 = $28,438 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(145974.852727 + 144882.323162 + 140565.496643 + 139480.72792 + 142448.968126) / 5 = $142,670 Mil.
Total Assets was $142,449 Mil.
Long-Term Debt was $29,251 Mil.
Total Current Assets was $53,154 Mil.
Total Current Liabilities was $41,116 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Honda Motor Co Ltd's current net income (ttm) was 5,884. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Honda Motor Co Ltd's current cash flow from operations (ttm) was 12,662. ==> 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)/Average Total Assets from Jun13 to Jun14
=5884.43164754/149075.183534
=0.03947291

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jun12 to Jun13
=3914.21166783/142670.473715
=0.02743533

Honda Motor Co Ltd's return on assets of this year was 0.03947291. Honda Motor Co Ltd's return on assets of last year was 0.02743533. ==> 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 5,884. Honda Motor Co Ltd's current cash flow from operations (ttm) was 12,662. ==> 12,662 > 5,884 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun14)=Long-Term Debt/Total Assets
=31501.4940043/152229.418125
=0.20693434

Gearing (Last Year: Jun13)=Long-Term Debt/Total Assets
=29250.5793946/142448.968126
=0.20534076

Honda Motor Co Ltd's gearing of this year was 0.20693434. Honda Motor Co Ltd's gearing of last year was 0.20534076. ==> Last year is lower than this year ==> 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: Jun14)=Total Current Assets/Total Current Liabilities
=54652.8798899/45133.1334775
=1.21092589

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=53154.404904/41116.4909253
=1.29277581

Honda Motor Co Ltd's current ratio of this year was 1.21092589. Honda Motor Co Ltd's current ratio of last year was 1.29277581. ==> 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 1802.3. Honda Motor Co Ltd's number of shares in issue last year was 1802.3. ==> 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
=30766.2529822/118276.488392
=0.26012146

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=28438.3743293/112497.127583
=0.252792

Honda Motor Co Ltd's gross margin of this year was 0.26012146. Honda Motor Co Ltd's gross margin of last year was 0.252792. ==> 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 average total assets throughout 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)/Average Total Assets from Jun13 to Jun14
=118276.488392/149075.183534
=0.7934016

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jun12 to Jun13
=112497.127583/142670.473715
=0.78851023

Honda Motor Co Ltd's asset turnover of this year was 0.7934016. Honda Motor Co Ltd's asset turnover of last year was 0.78851023. ==> 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+0+0+1+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Honda Motor Co Ltd has an F-score of 7 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, 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 1101011011
Q4 1011111111
Q5 1011001000
Q6 0100010100
Q7 1111001111
Q8 0000001011
Q9 1111001011
F-score 7667358577

Honda Motor Co Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 0111100111
Q4 1111111111
Q5 0000000000
Q6 1110000100
Q7 1111011111
Q8 0001100011
Q9 0111110001
F-score 5777666666
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