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ITT Corp (NYSE:ITT)
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 = 8 or 9
Bad or low score = 0 or 1

ITT Corp has an F-score of 7 indicating the company's financial situation is typical for a stable company.

ITT' 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 ITT Corp 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 430.7 + 11.2 + 32.2 + 38.3 = $512 Mil.
Cash Flow from Operations was 15.1 + 146.4 + -13.6 + 93.4 = $241 Mil.
Revenue was 634 + 645.5 + 674.5 + 663 = $2,617 Mil.
Gross Profit was 202.9 + 208.6 + 214.8 + 214.8 = $841 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(3365.8 + 3795.3 + 3740.2 + 3783.7 + 3812.5) / 5 = $3,700 Mil.
Total Assets was $3,813 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,758 Mil.
Total Current Liabilities was $840 Mil.
Net Income was 73 + 32.4 + 20.8 + 25.8 = $152 Mil.

Revenue was 547.5 + 554.3 + 608.2 + 609.2 = $2,319 Mil.
Gross Profit was 166.2 + 173.4 + 190.5 + 197.8 = $728 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(3703.6 + 3314.6 + 3386.1 + 3373.6 + 3365.8) / 5 = $3,429 Mil.
Total Assets was $3,366 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,571 Mil.
Total Current Liabilities was $842 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

ITT Corp's current net income (ttm) was 512. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

ITT Corp's current cash flow from operations (ttm) was 241. ==> 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)/Average Total Assets from Jun13 to Jun14
=512.4/3699.5
=0.1385052

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jun12 to Jun13
=152/3428.74
=0.04433115

ITT Corp's return on assets of this year was 0.1385052. ITT Corp's return on assets of last year was 0.04433115. ==> 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.

ITT Corp's current net income (ttm) was 512. ITT Corp's current cash flow from operations (ttm) was 241. ==> 241 =< 512 ==> CFROA =< ROA ==> Score 0.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun14)=Long-Term Debt/Total Assets
=0/3812.5
=0

Gearing (Last Year: Jun13)=Long-Term Debt/Total Assets
=0/3365.8
=0

ITT Corp's gearing of this year was 0. ITT Corp's gearing of last year was 0. ==> 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: Jun14)=Total Current Assets/Total Current Liabilities
=1757.6/839.9
=2.09263008

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=1570.6/841.5
=1.866429

ITT Corp's current ratio of this year was 2.09263008. ITT Corp's current ratio of last year was 1.866429. ==> 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.

ITT Corp's number of shares in issue this year was 93. ITT Corp's number of shares in issue last year was 91.6. ==> 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
=841.1/2617
=0.32139855

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=727.9/2319.2
=0.31385823

ITT Corp's gross margin of this year was 0.32139855. ITT Corp's gross margin of last year was 0.31385823. ==> 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 average total assets throughout 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)/Average Total Assets from Jun13 to Jun14
=2617/3699.5
=0.70739289

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jun12 to Jun13
=2319.2/3428.74
=0.67640008

ITT Corp's asset turnover of this year was 0.70739289. ITT Corp's asset turnover of last year was 0.67640008. ==> 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+0+1+1+0+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

ITT Corp has an F-score of 7 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.

ITT Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111011
Q2 1111111111
Q3 0111001011
Q4 1111111110
Q5 1111001111
Q6 0110110101
Q7 0111100001
Q8 1011001001
Q9 1111100111
F-score 6898646568

ITT Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 0001111111
Q2 1101111111
Q3 0001111111
Q4 1111110000
Q5 1111111111
Q6 1110000111
Q7 0000111110
Q8 1110111111
Q9 1111111111
F-score 6656887887
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