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MBIA Inc (NYSE:MBI)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

MBIA Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.

MBI' s 10-Year Piotroski F-Score Range
Min: 1   Max: 7
Current: 4

1
7

During the past 13 years, the highest Piotroski F-Score of MBIA Inc was 7. The lowest was 1. And the median was 4.


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 132 + 132 + 256 + 120 = $640 Mil.
Cash Flow from Operations was -138 + 796 + -424 + 28 = $262 Mil.
Revenue was 420 + 458 + 577 + 187 = $1,642 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(18122 + 17633 + 16953 + 16087 + 16024) / 5 = $16,964 Mil.
Total Assets was $16,024 Mil.
Long-Term Debt was $7,978 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 Mil.
Net Income was 7 + 636 + 164 + -178 = $629 Mil.

Revenue was 281 + 732 + 219 + 112 = $1,344 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(22295 + 22132 + 21724 + 21592 + 18122) / 5 = $21,173 Mil.
Total Assets was $18,122 Mil.
Long-Term Debt was $3,085 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 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.

MBIA Inc's current net income (ttm) was 640. ==> 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.

MBIA Inc's current cash flow from operations (ttm) was 262. ==> 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
=640/16963.8
=0.0377274

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jun12 to Jun13
=629/21173
=0.02970765

MBIA Inc's return on assets of this year was 0.0377274. MBIA Inc's return on assets of last year was 0.02970765. ==> 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.

MBIA Inc's current net income (ttm) was 640. MBIA Inc's current cash flow from operations (ttm) was 262. ==> 262 =< 640 ==> 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
=7978/16024
=0.49787818

Gearing (Last Year: Jun13)=Long-Term Debt/Total Assets
=3085/18122
=0.17023507

MBIA Inc's gearing of this year was 0.49787818. MBIA Inc's gearing of last year was 0.17023507. ==> 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: Jun14)=Total Current Assets/Total Current Liabilities
=0/0
=

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=0/0
=

MBIA Inc's current ratio of this year was . MBIA Inc's current ratio of last year was . ==> 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.

MBIA Inc's number of shares in issue this year was 192.9. MBIA Inc's number of shares in issue last year was 189.2. ==> 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
=0/1642
=0

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=0/1344
=0

MBIA Inc's gross margin of this year was 0. MBIA Inc's gross margin of last year was 0. ==> 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 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
=1642/16963.8
=0.09679435

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jun12 to Jun13
=1344/21173
=0.06347707

MBIA Inc's asset turnover of this year was 0.09679435. MBIA Inc's asset turnover of last year was 0.06347707. ==> 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+0+0+0+1
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

MBIA Inc has an F-score of 4 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.

MBIA Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1110011011
Q2 1110000001
Q3 1010010010
Q4 1101100001
Q5 0101010000
Q6 0000000000
Q7 1111011110
Q8 0000000000
Q9 1110010010
F-score 6653152143

MBIA Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 0101111111
Q2 0000011111
Q3 0111111001
Q4 0000011110
Q5 0010110000
Q6 0000000000
Q7 1111110000
Q8 0000000000
Q9 0111111001
F-score 1444575334
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