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Harley-Davidson Inc (NYSE:HOG)
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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Harley-Davidson Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

HOG' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 7

2
9

During the past 13 years, the highest Piotroski F-Score of Harley-Davidson Inc 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 (Mar15) TTM:Last Year (Mar14) TTM:
Net Income was 354.153 + 150.066 + 74.475 + 269.854 = $849 Mil.
Cash Flow from Operations was 367.006 + 396.276 + 179.809 + 174.7 = $1,118 Mil.
Revenue was 2000.699 + 1301.604 + 1200.157 + 1672.945 = $6,175 Mil.
Gross Profit was 849.812 + 525.505 + 438.48 + 714.114 = $2,528 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(9729.791 + 10076.296 + 10025.506 + 9528.097 + 10263.824) / 5 = $9924.7028 Mil.
Total Assets at the begining of this year (Mar14) was $9,730 Mil.
Long-Term Debt was $4,358 Mil.
Total Current Assets was $4,714 Mil.
Total Current Liabilities was $2,509 Mil.
Net Income was 271.739 + 162.716 + 75.409 + 265.917 = $776 Mil.

Revenue was 1794.307 + 1343.718 + 1190.634 + 1726.048 = $6,055 Mil.
Gross Profit was 719.205 + 539.805 + 443.6 + 707.634 = $2,410 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(9335.121 + 9707.198 + 9484.008 + 9405.04 + 9729.791) / 5 = $9532.2316 Mil.
Total Assets at the begining of last year (Mar13) was $9,335 Mil.
Long-Term Debt was $3,272 Mil.
Total Current Assets was $4,360 Mil.
Total Current Liabilities was $2,844 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.

Harley-Davidson Inc's current net income (TTM) was 849. ==> 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.

Harley-Davidson Inc's current cash flow from operations (TTM) was 1,118. ==> 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 (Mar14)
=848.548/9729.791
=0.08721133

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=775.781/9335.121
=0.08310348

Harley-Davidson Inc's return on assets of this year was 0.08721133. Harley-Davidson Inc's return on assets of last year was 0.08310348. ==> This year is higher. ==> Score 1.

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.

Harley-Davidson Inc's current net income (TTM) was 849. Harley-Davidson Inc's current cash flow from operations (TTM) was 1,118. ==> 1,118 > 849 ==> 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: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=4357.538/9924.7028
=0.4390598

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=3271.648/9532.2316
=0.34321952

Harley-Davidson Inc's gearing of this year was 0.4390598. Harley-Davidson Inc's gearing of last year was 0.34321952. ==> 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: Mar15)=Total Current Assets/Total Current Liabilities
=4713.805/2508.887
=1.87884309

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=4360.471/2844.114
=1.5331562

Harley-Davidson Inc's current ratio of this year was 1.87884309. Harley-Davidson Inc's current ratio of last year was 1.5331562. ==> 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.

Harley-Davidson Inc's number of shares in issue this year was 211.8. Harley-Davidson Inc's number of shares in issue last year was 220.5. ==> 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
=2527.911/6175.405
=0.40935145

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2410.244/6054.707
=0.39807773

Harley-Davidson Inc's gross margin of this year was 0.40935145. Harley-Davidson Inc's gross margin of last year was 0.39807773. ==> This year's gross margin is higher. ==> Score 1.

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 (Mar14)
=6175.405/9729.791
=0.63469041

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=6054.707/9335.121
=0.64859438

Harley-Davidson Inc's asset turnover of this year was 0.63469041. Harley-Davidson Inc's asset turnover of last year was 0.64859438. ==> 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+1+1+0+1+1+1+0
=7

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

Harley-Davidson Inc has an F-score of 7. 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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Harley-Davidson Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111011111
Question 2 1110111111
Question 3 0100011111
Question 4 1000111111
Question 5 0100001010
Question 6 1001010101
Question 7 1111100111
Question 8 1101010111
Question 9 0101001111
F-score 6735366888

Harley-Davidson Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 1111111111
Question 3 1101111111
Question 4 1111111111
Question 5 0101111100
Question 6 1111000011
Question 7 1111111111
Question 8 1111111111
Question 9 1111111110
F-score 8979888887
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