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International Game Technology PLC (NYSE:IGT)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

International Game Technology PLC has an F-score of 6 indicating the company's financial situation is typical for a stable company.

IGT' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 7
Current: 6

4
7

During the past 13 years, the highest Piotroski F-Score of International Game Technology PLC was 7. The lowest was 4. 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 local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Net Income was 73.501 + -92.774 + 72.696 + -1.903 = $52 Mil.
Cash Flow from Operations was 315.003 + 205.605 + 318.202 + 97.19 = $936 Mil.
Revenue was 1364.957 + 1281.561 + 1285.469 + 1265.65 = $5,198 Mil.
Gross Profit was 510.634 + 511.022 + 502.997 + 503.713 = $2,028 Mil.
Average Total Assets from the begining of this year (Sep15)
to the end of this year (Sep16) was
(15818.375 + 15114.692 + 14930.485 + 15409.166 + 15295.15) / 5 = $15313.5736 Mil.
Total Assets at the begining of this year (Sep15) was $15,818 Mil.
Long-Term Debt was $8,287 Mil.
Total Current Assets was $2,181 Mil.
Total Current Liabilities was $2,326 Mil.
Net Income was -150.615 + -39.317 + -116.89 + 7.132 = $-300 Mil.

Revenue was 891.805 + 848.242 + 1274.284 + 1201.573 = $4,216 Mil.
Gross Profit was 296.745 + 306.409 + 480.392 + 453.963 = $1,538 Mil.
Average Total Assets from the begining of last year (Sep14)
to the end of last year (Sep15) was
(9267.38 + 8435.297 + 8283.293 + 16203.289 + 15818.375) / 5 = $11601.5268 Mil.
Total Assets at the begining of last year (Sep14) was $9,267 Mil.
Long-Term Debt was $8,748 Mil.
Total Current Assets was $2,604 Mil.
Total Current Liabilities was $1,917 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.

International Game Technology PLC's current net income (TTM) was 52. ==> 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.

International Game Technology PLC's current cash flow from operations (TTM) was 936. ==> 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 (Sep15)
=51.52/15818.375
=0.00325697

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=-299.69/9267.38
=-0.03233816

International Game Technology PLC's return on assets of this year was 0.00325697. International Game Technology PLC's return on assets of last year was -0.03233816. ==> 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.

International Game Technology PLC's current net income (TTM) was 52. International Game Technology PLC's current cash flow from operations (TTM) was 936. ==> 936 > 52 ==> 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: Sep16)=Long-Term Debt/Average Total Assets from Sep15 to Sep16
=8286.69/15313.5736
=0.54113365

Gearing (Last Year: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=8747.737/11601.5268
=0.75401601

International Game Technology PLC's gearing of this year was 0.54113365. International Game Technology PLC's gearing of last year was 0.75401601. ==> This year is lower or equal to last year. ==> Score 1.

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: Sep16)=Total Current Assets/Total Current Liabilities
=2180.635/2325.813
=0.93757968

Current Ratio (Last Year: Sep15)=Total Current Assets/Total Current Liabilities
=2604.173/1917.447
=1.35814601

International Game Technology PLC's current ratio of this year was 0.93757968. International Game Technology PLC's current ratio of last year was 1.35814601. ==> Last year's current ratio is higher ==> Score 0.

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.

International Game Technology PLC's number of shares in issue this year was 202. International Game Technology PLC's number of shares in issue last year was 200.9. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=2028.366/5197.637
=0.39024772

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1537.509/4215.904
=0.3646926

International Game Technology PLC's gross margin of this year was 0.39024772. International Game Technology PLC's gross margin of last year was 0.3646926. ==> 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 (Sep15)
=5197.637/15818.375
=0.32858223

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=4215.904/9267.38
=0.45491865

International Game Technology PLC's asset turnover of this year was 0.32858223. International Game Technology PLC's asset turnover of last year was 0.45491865. ==> 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+1+0+0+1+0
=6

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

International Game Technology PLC has an F-score of 6 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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

International Game Technology PLC Annual Data

Dec11Dec12Dec13Dec14Dec15
Question 1 11110
Question 2 11111
Question 3 11000
Question 4 11111
Question 5 10110
Question 6 01001
Question 7 00000
Question 8 00010
Question 9 11011
F-score 66464

International Game Technology PLC Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Question 1 1110000011
Question 2 1111111111
Question 3 0000000011
Question 4 1111111111
Question 5 1111000011
Question 6 0100111100
Question 7 1101000000
Question 8 0011110111
Question 9 0010111100
F-score 5665554566
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