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Invesco Ltd. (NYSE:IVZ)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

Invesco Ltd. has an F-score of 6 indicating the company's financial situation is typical for a stable company.

IVZ' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of Invesco Ltd. was 9. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 287.4 + 228.1 + 202.6 + 222.2 = $940 Mil.
Cash Flow from Operations was 190.3 + 334.3 + 740.2 + -484.6 = $780 Mil.
Revenue was 1225.1 + 1171.8 + 1135.5 + 1141.8 = $4,674 Mil.
Gross Profit was 1225.1 + 1171.8 + 1135.5 + 1141.8 = $4,674 Mil.
Total Assets at the begining of this year (Dec12) was $17,492 Mil.
Total Assets was $19,271 Mil.
Long-Term Debt was $5,770 Mil.
Total Current Assets was $4,463 Mil.
Total Current Liabilities was $3,738 Mil.
Net Income was 158.7 + 170.6 + 153.9 + 193.9 = $677 Mil.

Revenue was 1046.7 + 1013.9 + 981.8 + 1033.7 = $4,076 Mil.
Gross Profit was 1046.7 + 1013.9 + 981.8 + 1033.7 = $4,076 Mil.
Total Assets at the begining of last year (Dec11) was $19,347 Mil.
Total Assets was $17,492 Mil.
Long-Term Debt was $5,085 Mil.
Total Current Assets was $2,956 Mil.
Total Current Liabilities was $2,942 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.

Invesco Ltd.'s current net income was 940. ==> 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.

Invesco Ltd.'s current cash flow from operations was 780. ==> 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)
=940.3/17492.4
=0.05375477

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=677.1/19347
=0.03499767

Invesco Ltd.'s return on assets of this year was 0.05375477. Invesco Ltd.'s return on assets of last year was 0.03499767. ==> 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.

Invesco Ltd.'s current net income was 940. Invesco Ltd.'s current cash flow from operations was 780. ==> 780 =< 940 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=5770.3/19270.5
=0.29943696

Gearing (Last Year)=Long-Term Debt/Total Assets
=5085.4/17492.4
=0.29072054

Invesco Ltd.'s gearing of this year was 0.29943696. Invesco Ltd.'s gearing of last year was 0.29072054. ==> Last year is lower ==> 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)=Total Current Assets/Total Current Liabilities
=4463.3/3737.5
=1.19419398

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2955.9/2942.3
=1.00462223

Invesco Ltd.'s current ratio of this year was 1.19419398. Invesco Ltd.'s current ratio of last year was 1.00462223. ==> 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.

Invesco Ltd.'s number of shares in issue this year was 445.8. Invesco Ltd.'s number of shares in issue last year was 451.4. ==> 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
=4674.2/4674.2
=1

Gross Margin (Last Year)=Gross Profit/Revenue
=4076.1/4076.1
=1

Invesco Ltd.'s gross margin of this year was 1. Invesco Ltd.'s gross margin of last year was 1. ==> Last year's gross margin is higher ==> Score 0.

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)
=4674.2/17492.4
=0.26721319

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=4076.1/19347
=0.21068383

Invesco Ltd.'s asset turnover of this year was 0.26721319. Invesco Ltd.'s asset turnover of last year was 0.21068383. ==> 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+0+1+1+0+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Invesco Ltd. 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 own currency.

Invesco Ltd. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 0111111111
Q2 1111111111
Q3 0110001001
Q4 1101110110
Q5 1110110110
Q6 0111010001
Q7 1001100011
Q8 1000000000
Q9 0110011011
F-score 5765564466

Invesco Ltd. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 0010101111
Q4 0111010110
Q5 0111111100
Q6 1001101111
Q7 1111111111
Q8 0000000000
Q9 0000011111
F-score 4566667876
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