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Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT)
Piotroski F-Score
9 (As of Today)

Good Sign:

Piotroski F-Score of 9 is 9, 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

Starwood Hotels & Resorts Worldwide Inc has an F-score of 9. It is a good or high score, which usually indicates a very healthy situation.

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

5
9

During the past 13 years, the highest Piotroski F-Score of Starwood Hotels & Resorts Worldwide Inc was 9. The lowest was 5. And the median was 7.


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 128 + 157 + 137 + 213 = $635 Mil.
Cash Flow from Operations was 296 + 323 + 320 + 212 = $1,151 Mil.
Revenue was 1506 + 1508 + 1562 + 1539 = $6,115 Mil.
Gross Profit was 1051 + 1049 + 403 + 386 = $2,889 Mil.
Total Assets at the begining of this year (Dec12) was $8,855 Mil.
Total Assets was $8,762 Mil.
Long-Term Debt was $1,523 Mil.
Total Current Assets was $1,996 Mil.
Total Current Liabilities was $1,924 Mil.
Net Income was 142 + 170 + 122 + 128 = $562 Mil.

Revenue was 1533 + 1455 + 1618 + 1715 = $6,321 Mil.
Gross Profit was 1028 + 951 + 390 + 375 = $2,744 Mil.
Total Assets at the begining of last year (Dec11) was $9,560 Mil.
Total Assets was $8,855 Mil.
Long-Term Debt was $1,656 Mil.
Total Current Assets was $1,889 Mil.
Total Current Liabilities was $2,016 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.

Starwood Hotels & Resorts Worldwide Inc's current net income was 635. ==> 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.

Starwood Hotels & Resorts Worldwide Inc's current cash flow from operations was 1,151. ==> 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)
=635/8855
=0.0717109

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=562/9560
=0.05878661

Starwood Hotels & Resorts Worldwide Inc's return on assets of this year was 0.0717109. Starwood Hotels & Resorts Worldwide Inc's return on assets of last year was 0.05878661. ==> 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.

Starwood Hotels & Resorts Worldwide Inc's current net income was 635. Starwood Hotels & Resorts Worldwide Inc's current cash flow from operations was 1,151. ==> 1,151 > 635 ==> 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
=1523/8762
=0.17381876

Gearing (Last Year)=Long-Term Debt/Total Assets
=1656/8855
=0.18701299

Starwood Hotels & Resorts Worldwide Inc's gearing of this year was 0.17381876. Starwood Hotels & Resorts Worldwide Inc's gearing of last year was 0.18701299. ==> This year is lower. ==> 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)=Total Current Assets/Total Current Liabilities
=1996/1924
=1.03742204

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1889/2016
=0.93700397

Starwood Hotels & Resorts Worldwide Inc's current ratio of this year was 1.03742204. Starwood Hotels & Resorts Worldwide Inc's current ratio of last year was 0.93700397. ==> This year's current ratio is higher. ==> Score 1.

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.

Starwood Hotels & Resorts Worldwide Inc's number of shares in issue this year was 190. Starwood Hotels & Resorts Worldwide Inc's number of shares in issue last year was 197. ==> 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
=2889/6115
=0.47244481

Gross Margin (Last Year)=Gross Profit/Revenue
=2744/6321
=0.43410853

Starwood Hotels & Resorts Worldwide Inc's gross margin of this year was 0.47244481. Starwood Hotels & Resorts Worldwide Inc's gross margin of last year was 0.43410853. ==> 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)
=6115/8855
=0.6905703

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=6321/9560
=0.66119247

Starwood Hotels & Resorts Worldwide Inc's asset turnover of this year was 0.6905703. Starwood Hotels & Resorts Worldwide Inc's asset turnover of last year was 0.66119247. ==> 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+1+1+1+1
=9

Good or high score = 8 or 9

Bad or low score = 0 or 1

Starwood Hotels & Resorts Worldwide Inc has an F-score of 9. 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.

Starwood Hotels & Resorts Worldwide Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1110001011
Q4 1101111111
Q5 1110111111
Q6 1101001101
Q7 0011110001
Q8 0011001111
Q9 1101001011
F-score 7767558679

Starwood Hotels & Resorts Worldwide Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1011011111
Q4 1111111111
Q5 1111111111
Q6 1101100101
Q7 0000001111
Q8 1111111111
Q9 1011111111
F-score 8678778989
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