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

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

International Game Technology has an F-score of 5 indicating the company's financial situation is typical for a stable company.

IGT' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 5

4
8

During the past 13 years, the highest Piotroski F-Score of International Game Technology was 8. 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 own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 79.2 + 25.7 + 72.1 + 70.9 = $248 Mil.
Cash Flow from Operations was 76.1 + -141.3 + 126.6 + 137.8 = $199 Mil.
Revenue was 541.2 + 512.8 + 467.6 + 536.5 = $2,058 Mil.
Gross Profit was 309.8 + 292.8 + 284.9 + 327.1 = $1,215 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(4612.8 + 4347.5 + 4301.5 + 4057.4 + 3989.5) / 5 = $4,262 Mil.
Total Assets as of Sep13 was $4,613 Mil.
Long-Term Debt was $1,879 Mil.
Total Current Assets was $1,221 Mil.
Total Current Liabilities was $545 Mil.
Net Income was 65.3 + 78.2 + 65.7 + 63.5 = $273 Mil.

Revenue was 530.3 + 600 + 579 + 632.4 = $2,342 Mil.
Gross Profit was 309.5 + 341.3 + 337.2 + 356.7 = $1,345 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(4285.1 + 4176.5 + 4199.7 + 4114.4 + 4612.8) / 5 = $4,278 Mil.
Total Assets as of Sep12 was $4,285 Mil.
Long-Term Debt was $1,366 Mil.
Total Current Assets was $1,776 Mil.
Total Current Liabilities was $1,509 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

International Game Technology's current net income (ttm) was 248. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

International Game Technology's current cash flow from operations (ttm) was 199. ==> 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)/Beginning of This Year Total Assets (Sep13)
=247.9/4612.8
=0.05374176

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Sep12)
=272.7/4285.1
=0.06363912

International Game Technology's return on assets of this year was 0.05374176. International Game Technology's return on assets of last year was 0.06363912. ==> Last year is higher ==> Score 0.

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.

International Game Technology's current net income (ttm) was 248. International Game Technology's current cash flow from operations (ttm) was 199. ==> 199 =< 248 ==> CFROA =< ROA ==> Score 0.

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
=1878.6/4261.74
=0.44080587

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=1366.3/4277.7
=0.31940061

International Game Technology's gearing of this year was 0.44080587. International Game Technology's gearing of last year was 0.31940061. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=1221.1/544.8
=2.24137298

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=1776/1508.5
=1.17732847

International Game Technology's current ratio of this year was 2.24137298. International Game Technology's current ratio of last year was 1.17732847. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

International Game Technology's number of shares in issue this year was 249.3. International Game Technology's number of shares in issue last year was 264. ==> 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
=1214.6/2058.1
=0.59015597

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1344.7/2341.7
=0.57424094

International Game Technology's gross margin of this year was 0.59015597. International Game Technology's gross margin of last year was 0.57424094. ==> 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 begining of the year total assets) 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)/Beginning of This Year Total Assets (Sep13)
=2058.1/4612.8
=0.44617152

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Sep12)
=2341.7/4285.1
=0.54647499

International Game Technology's asset turnover of this year was 0.44617152. International Game Technology's asset turnover of last year was 0.54647499. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+0+0+1+1+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

International Game Technology has an F-score of 5 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.

International Game Technology Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
Q1 1111111111
Q2 1111111111
Q3 0110011010
Q4 1111111110
Q5 1100110010
Q6 0011011001
Q7 1111100111
Q8 0110011001
Q9 1110001110
F-score 6885577575

International Game Technology Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 0001111000
Q4 1111111000
Q5 0000111100
Q6 0000000011
Q7 1111111111
Q8 0011100001
Q9 1111111100
F-score 5567877545
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