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Meredith Corp (NYSE:MDP)
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

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

MDP' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of Meredith Corp 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 local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Net Income was 32.519 + 80.904 + -90.515 + 33.973 = $57 Mil.
Cash Flow from Operations was 44.873 + 125.918 + 52.977 + 35.36 = $259 Mil.
Revenue was 406.413 + 422.771 + 435.778 + 399.879 = $1,665 Mil.
Gross Profit was 255.348 + 266.032 + 284.888 + 249.651 = $1,056 Mil.
Average Total Assets from the begining of this year (Sep15)
to the end of this year (Sep16) was
(2878.978 + 2878.433 + 2823.898 + 2628.285 + 2636.68) / 5 = $2769.2548 Mil.
Total Assets at the begining of this year (Sep15) was $2,879 Mil.
Long-Term Debt was $622 Mil.
Total Current Assets was $502 Mil.
Total Current Liabilities was $475 Mil.
Net Income was 39.591 + 25.256 + 42.579 + 11.029 = $118 Mil.

Revenue was 398.905 + 398.179 + 425.908 + 384.666 = $1,608 Mil.
Gross Profit was 258.622 + 243.731 + 263.585 + 231.488 = $997 Mil.
Average Total Assets from the begining of last year (Sep14)
to the end of last year (Sep15) was
(2542.59 + 2802.569 + 2828.723 + 2843.282 + 2878.978) / 5 = $2779.2284 Mil.
Total Assets at the begining of last year (Sep14) was $2,543 Mil.
Long-Term Debt was $754 Mil.
Total Current Assets was $520 Mil.
Total Current Liabilities was $537 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.

Meredith Corp's current net income (TTM) was 57. ==> 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.

Meredith Corp's current cash flow from operations (TTM) was 259. ==> 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 (Sep15)
=56.881/2878.978
=0.01975736

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=118.455/2542.59
=0.04658832

Meredith Corp's return on assets of this year was 0.01975736. Meredith Corp's return on assets of last year was 0.04658832. ==> 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.

Meredith Corp's current net income (TTM) was 57. Meredith Corp's current cash flow from operations (TTM) was 259. ==> 259 > 57 ==> 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: Sep16)=Long-Term Debt/Average Total Assets from Sep15 to Sep16
=622.402/2769.2548
=0.22475433

Gearing (Last Year: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=753.75/2779.2284
=0.27120837

Meredith Corp's gearing of this year was 0.22475433. Meredith Corp's gearing of last year was 0.27120837. ==> 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: Sep16)=Total Current Assets/Total Current Liabilities
=501.715/475.165
=1.05587533

Current Ratio (Last Year: Sep15)=Total Current Assets/Total Current Liabilities
=520.052/536.901
=0.96861805

Meredith Corp's current ratio of this year was 1.05587533. Meredith Corp's current ratio of last year was 0.96861805. ==> 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.

Meredith Corp's number of shares in issue this year was 45.5. Meredith Corp's number of shares in issue last year was 45.4. ==> 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
=1055.919/1664.841
=0.63424615

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=997.426/1607.658
=0.62042176

Meredith Corp's gross margin of this year was 0.63424615. Meredith Corp's gross margin of last year was 0.62042176. ==> 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 (Sep15)
=1664.841/2878.978
=0.578275

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=1607.658/2542.59
=0.63229148

Meredith Corp's asset turnover of this year was 0.578275. Meredith Corp's asset turnover of last year was 0.63229148. ==> 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

Meredith Corp 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 local exchange's currency.

Meredith Corp Annual Data

Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15Jun16
Question 1 1101111111
Question 2 1111111111
Question 3 0001101010
Question 4 1111111111
Question 5 1011101011
Question 6 0010001101
Question 7 1110011010
Question 8 1001101011
Question 9 0001000000
F-score 6457648476

Meredith Corp Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Question 1 1111111111
Question 2 1111111111
Question 3 0011100100
Question 4 1111111111
Question 5 0000111111
Question 6 1111000111
Question 7 0110100100
Question 8 0011110011
Question 9 0010000000
F-score 4586754766
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