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Matthews International Corporation (NAS:MATW)
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

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

MATW' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 9
Current: 6

4
9

During the past 13 years, the highest Piotroski F-Score of Matthews International Corporation was 9. 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 (Dec15) TTM:Last Year (Dec14) TTM:
Net Income was 9.576 + 23.14 + 16.974 + 4.614 = $54 Mil.
Cash Flow from Operations was 45.693 + 48.223 + 38.725 + 10.019 = $143 Mil.
Revenue was 349.394 + 364.752 + 368.338 + 354.232 = $1,437 Mil.
Gross Profit was 127.695 + 135.436 + 141.574 + 126.567 = $531 Mil.
Average Total Assets from the begining of this year (Dec14)
to the end of this year (Dec15) was
(1971.472 + 1921.113 + 1930.382 + 2163.018 + 2126.2) / 5 = $2022.437 Mil.
Total Assets at the begining of this year (Dec14) was $1,971 Mil.
Long-Term Debt was $901 Mil.
Total Current Assets was $585 Mil.
Total Current Liabilities was $223 Mil.
Net Income was 11.333 + 19.041 + 4.805 + 14.36 = $50 Mil.

Revenue was 246.837 + 279.983 + 349.832 + 343.584 = $1,220 Mil.
Gross Profit was 90.18 + 104.23 + 116.708 + 124.67 = $436 Mil.
Average Total Assets from the begining of last year (Dec13)
to the end of last year (Dec14) was
(1217.301 + 1228.061 + 1258.87 + 2024.048 + 1971.472) / 5 = $1539.9504 Mil.
Total Assets at the begining of last year (Dec13) was $1,217 Mil.
Long-Term Debt was $705 Mil.
Total Current Assets was $546 Mil.
Total Current Liabilities was $221 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.

Matthews International Corporation's current net income (TTM) was 54. ==> 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.

Matthews International Corporation's current cash flow from operations (TTM) was 143. ==> 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 (Dec14)
=54.304/1971.472
=0.0275449

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec13)
=49.539/1217.301
=0.04069577

Matthews International Corporation's return on assets of this year was 0.0275449. Matthews International Corporation's return on assets of last year was 0.04069577. ==> Last year is higher ==> Score 0.

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.

Matthews International Corporation's current net income (TTM) was 54. Matthews International Corporation's current cash flow from operations (TTM) was 143. ==> 143 > 54 ==> 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: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=901.46/2022.437
=0.44572958

Gearing (Last Year: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=705.481/1539.9504
=0.4581193

Matthews International Corporation's gearing of this year was 0.44572958. Matthews International Corporation's gearing of last year was 0.4581193. ==> 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: Dec15)=Total Current Assets/Total Current Liabilities
=584.568/223.456
=2.61603179

Current Ratio (Last Year: Dec14)=Total Current Assets/Total Current Liabilities
=546.266/221.452
=2.46674674

Matthews International Corporation's current ratio of this year was 2.61603179. Matthews International Corporation's current ratio of last year was 2.46674674. ==> This year's current ratio is higher. ==> Score 1.

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.

Matthews International Corporation's number of shares in issue this year was 33.2. Matthews International Corporation's number of shares in issue last year was 33.1. ==> 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
=531.272/1436.716
=0.3697822

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=435.788/1220.236
=0.35713419

Matthews International Corporation's gross margin of this year was 0.3697822. Matthews International Corporation's gross margin of last year was 0.35713419. ==> 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 (Dec14)
=1436.716/1971.472
=0.72875293

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec13)
=1220.236/1217.301
=1.00241107

Matthews International Corporation's asset turnover of this year was 0.72875293. Matthews International Corporation's asset turnover of last year was 1.00241107. ==> 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+0+1+1+1+0+1+0
=6

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

Matthews International Corporation 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.

Matthews International Corporation Annual Data

Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15
Question 1 1111111111
Question 2 1111111111
Question 3 0010110000
Question 4 0111111111
Question 5 1000101001
Question 6 1101010011
Question 7 1111111100
Question 8 1010100001
Question 9 0010110110
F-score 6575875556

Matthews International Corporation Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 0000000000
Question 4 1111111111
Question 5 0111000011
Question 6 0111110011
Question 7 1110000000
Question 8 0000000011
Question 9 1000111100
F-score 5665554466
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