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Mohawk Industries Inc (NYSE:MHK)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

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

Mohawk Industries Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

MHK' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 7

3
8

During the past 13 years, the highest Piotroski F-Score of Mohawk Industries Inc was 8. 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 (Sep15) TTM:Last Year (Sep14) TTM:
Net Income was 146.868 + 22.346 + 186.492 + 214.905 = $571 Mil.
Cash Flow from Operations was 338.765 + -49.646 + 317.165 + 389.433 = $996 Mil.
Revenue was 1951.446 + 1881.177 + 2041.733 + 2150.656 = $8,025 Mil.
Gross Profit was 541.603 + 511.943 + 615.129 + 661.404 = $2,330 Mil.
Average Total Assets from the begining of this year (Sep14)
to the end of this year (Sep15) was
(8701.46 + 8285.544 + 8284.622 + 10165.67 + 10064.482) / 5 = $9100.3556 Mil.
Total Assets at the begining of this year (Sep14) was $8,701 Mil.
Long-Term Debt was $1,263 Mil.
Total Current Assets was $3,499 Mil.
Total Current Liabilities was $3,300 Mil.
Net Income was 94.651 + 81.081 + 152.75 + 151.266 = $480 Mil.

Revenue was 1924.104 + 1813.095 + 2048.247 + 1990.658 = $7,776 Mil.
Gross Profit was 512.797 + 481.355 + 574.812 + 556.422 = $2,125 Mil.
Average Total Assets from the begining of last year (Sep13)
to the end of last year (Sep14) was
(8564.157 + 8494.177 + 8681.488 + 8881.681 + 8701.46) / 5 = $8664.5926 Mil.
Total Assets at the begining of last year (Sep13) was $8,564 Mil.
Long-Term Debt was $1,807 Mil.
Total Current Assets was $3,369 Mil.
Total Current Liabilities was $1,831 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.

Mohawk Industries Inc's current net income (TTM) was 571. ==> 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.

Mohawk Industries Inc's current cash flow from operations (TTM) was 996. ==> 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 (Sep14)
=570.611/8701.46
=0.06557647

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=479.748/8564.157
=0.05601812

Mohawk Industries Inc's return on assets of this year was 0.06557647. Mohawk Industries Inc's return on assets of last year was 0.05601812. ==> This year is higher. ==> Score 1.

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.

Mohawk Industries Inc's current net income (TTM) was 571. Mohawk Industries Inc's current cash flow from operations (TTM) was 996. ==> 996 > 571 ==> 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: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=1263.176/9100.3556
=0.13880513

Gearing (Last Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=1806.821/8664.5926
=0.20852925

Mohawk Industries Inc's gearing of this year was 0.13880513. Mohawk Industries Inc's gearing of last year was 0.20852925. ==> 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: Sep15)=Total Current Assets/Total Current Liabilities
=3499.194/3299.784
=1.06043123

Current Ratio (Last Year: Sep14)=Total Current Assets/Total Current Liabilities
=3368.814/1831.357
=1.83951791

Mohawk Industries Inc's current ratio of this year was 1.06043123. Mohawk Industries Inc's current ratio of last year was 1.83951791. ==> Last year's current ratio is higher ==> Score 0.

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.

Mohawk Industries Inc's number of shares in issue this year was 74.4. Mohawk Industries Inc's number of shares in issue last year was 73.4. ==> 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
=2330.079/8025.012
=0.29035209

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2125.386/7776.104
=0.27332273

Mohawk Industries Inc's gross margin of this year was 0.29035209. Mohawk Industries Inc's gross margin of last year was 0.27332273. ==> 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 (Sep14)
=8025.012/8701.46
=0.9222604

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=7776.104/8564.157
=0.90798242

Mohawk Industries Inc's asset turnover of this year was 0.9222604. Mohawk Industries Inc's asset turnover of last year was 0.90798242. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+1+0+0+1+1
=7

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

Mohawk Industries Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


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.

Mohawk Industries Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1110011111
Question 2 1111111111
Question 3 0010110111
Question 4 1111111111
Question 5 0111011001
Question 6 0011101100
Question 7 0001000000
Question 8 0100010111
Question 9 1000111110
F-score 4565576766

Mohawk Industries Inc Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
Question 1 1111111111
Question 2 1111111111
Question 3 1111111111
Question 4 1111111111
Question 5 0001111111
Question 6 0000000000
Question 7 0000000000
Question 8 1111111111
Question 9 1111000001
F-score 6667666667
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