Switch to:
Hospira Inc (NYSE:HSP)
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

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

HSP' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 7

3
8

During the past 13 years, the highest Piotroski F-Score of Hospira Inc was 8. 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 33.5 + 67.9 + 70.9 + 158.6 = $331 Mil.
Cash Flow from Operations was 255.9 + 18.3 + 157.2 + 158.8 = $590 Mil.
Revenue was 1084.4 + 1050.8 + 1135.8 + 1150.6 = $4,422 Mil.
Gross Profit was 321.6 + 369.6 + 400 + 431.3 = $1,523 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(6032.2 + 6178.9 + 6157.7 + 6401.8 + 6493.1) / 5 = $6252.74 Mil.
Total Assets at the begining of this year (Sep13) was $6,032 Mil.
Long-Term Debt was $1,749 Mil.
Total Current Assets was $2,759 Mil.
Total Current Liabilities was $1,170 Mil.
Net Income was 5.3 + -76.6 + 32.9 + 1.9 = $-37 Mil.

Revenue was 1098.9 + 884 + 1026.2 + 1008.2 = $4,017 Mil.
Gross Profit was 315.6 + 150.1 + 318.7 + 290.2 = $1,075 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(6074.2 + 6088.6 + 6068.5 + 6014.9 + 6032.2) / 5 = $6055.68 Mil.
Total Assets at the begining of last year (Sep12) was $6,074 Mil.
Long-Term Debt was $1,747 Mil.
Total Current Assets was $2,710 Mil.
Total Current Liabilities was $1,014 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.

Hospira Inc's current net income (TTM) was 331. ==> 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.

Hospira Inc's current cash flow from operations (TTM) was 590. ==> 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)/Total Assets at the Beginning of This Year (Sep13)
=330.9/6032.2
=0.05485561

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=-36.5/6074.2
=-0.00600902

Hospira Inc's return on assets of this year was 0.05485561. Hospira Inc's return on assets of last year was -0.00600902. ==> 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.

Hospira Inc's current net income (TTM) was 331. Hospira Inc's current cash flow from operations (TTM) was 590. ==> 590 > 331 ==> 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
=1749.2/6252.74
=0.27974936

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=1747.4/6055.68
=0.28855554

Hospira Inc's gearing of this year was 0.27974936. Hospira Inc's gearing of last year was 0.28855554. ==> 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
=2759.2/1169.9
=2.35849218

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=2709.7/1014
=2.67228797

Hospira Inc's current ratio of this year was 2.35849218. Hospira Inc's current ratio of last year was 2.67228797. ==> 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.

Hospira Inc's number of shares in issue this year was 171.8. Hospira Inc's number of shares in issue last year was 167. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=1522.5/4421.6
=0.34433237

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1074.6/4017.3
=0.26749309

Hospira Inc's gross margin of this year was 0.34433237. Hospira Inc's gross margin of last year was 0.26749309. ==> 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 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 (Sep13)
=4421.6/6032.2
=0.73299957

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=4017.3/6074.2
=0.66137104

Hospira Inc's asset turnover of this year was 0.73299957. Hospira Inc's asset turnover of last year was 0.66137104. ==> 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+0+1+1
=7

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

Hospira 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.

Hospira Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 111111010
Q2 111111111
Q3 000110010
Q4 111110111
Q5 110111111
Q6 100010100
Q7 011000101
Q8 110111000
Q9 001010010
F-score 665684564

Hospira Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 0010000111
Q2 1111111111
Q3 0011110111
Q4 1111111111
Q5 0000100001
Q6 1000000010
Q7 1001001000
Q8 0000000111
Q9 0111100111
F-score 4355533677
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK