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Key Energy Services Inc (NYSE:KEG)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Key Energy Services Inc has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

KEG' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 3

2
9

During the past 13 years, the highest Piotroski F-Score of Key Energy Services Inc was 9. The lowest was 2. And the median was 5.


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 -12.518 + -11.899 + -52.196 + -62.229 = $-139 Mil.
Cash Flow from Operations was 71.625 + 45.694 + 61.574 + 18.816 = $198 Mil.
Revenue was 362.164 + 356.141 + 350.595 + 365.798 = $1,435 Mil.
Gross Profit was 102.283 + 97.839 + 87.712 + 93.686 = $382 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(2684.047 + 2587.47 + 2551.627 + 2457.606 + 2406.646) / 5 = $2537.4792 Mil.
Total Assets at the begining of this year (Sep13) was $2,684 Mil.
Long-Term Debt was $759 Mil.
Total Current Assets was $482 Mil.
Total Current Liabilities was $218 Mil.
Net Income was 13.485 + -0.274 + -4.128 + -4.848 = $4 Mil.

Revenue was 466.471 + 428.449 + 411.39 + 389.673 = $1,696 Mil.
Gross Profit was 148.918 + 129.267 + 124.288 + 121.376 = $524 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(2819.923 + 2761.588 + 2761.301 + 2732.437 + 2684.047) / 5 = $2751.8592 Mil.
Total Assets at the begining of last year (Sep12) was $2,820 Mil.
Long-Term Debt was $833 Mil.
Total Current Assets was $601 Mil.
Total Current Liabilities was $244 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.

Key Energy Services Inc's current net income (TTM) was -139. ==> Negative ==> Score 0.

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.

Key Energy Services Inc's current cash flow from operations (TTM) was 198. ==> 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)
=-138.842/2684.047
=-0.0517286

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=4.235/2819.923
=0.00150181

Key Energy Services Inc's return on assets of this year was -0.0517286. Key Energy Services Inc's return on assets of last year was 0.00150181. ==> 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.

Key Energy Services Inc's current net income (TTM) was -139. Key Energy Services Inc's current cash flow from operations (TTM) was 198. ==> 198 > -139 ==> 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
=758.565/2537.4792
=0.29894432

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=832.693/2751.8592
=0.30259288

Key Energy Services Inc's gearing of this year was 0.29894432. Key Energy Services Inc's gearing of last year was 0.30259288. ==> 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
=482.365/217.701
=2.21572248

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=601.417/244.217
=2.46263364

Key Energy Services Inc's current ratio of this year was 2.21572248. Key Energy Services Inc's current ratio of last year was 2.46263364. ==> 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.

Key Energy Services Inc's number of shares in issue this year was 153.6. Key Energy Services Inc's number of shares in issue last year was 152.4. ==> 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
=381.52/1434.698
=0.26592356

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=523.849/1695.983
=0.30887633

Key Energy Services Inc's gross margin of this year was 0.26592356. Key Energy Services Inc's gross margin of last year was 0.30887633. ==> Last year's gross margin is higher ==> Score 0.

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)
=1434.698/2684.047
=0.5345279

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=1695.983/2819.923
=0.60142883

Key Energy Services Inc's asset turnover of this year was 0.5345279. Key Energy Services Inc's asset turnover of last year was 0.60142883. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+1+0+1+1+0+0+0+0
=3

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

Key Energy Services Inc has an F-score of 3. It is a bad or low score, which usually implies poor business operation.


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.

Key Energy Services Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 0111101110
Q2 1111111111
Q3 1110001100
Q4 1111111111
Q5 1110011011
Q6 1010000101
Q7 0001110000
Q8 1111001100
Q9 0110001100
F-score 6785447744

Key Energy Services Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111010000
Q2 1111111111
Q3 0000000000
Q4 1111111111
Q5 0111111111
Q6 1101111100
Q7 0000000000
Q8 1000000000
Q9 1000000000
F-score 6545454433
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