Switch to:
Morningstar Inc (NAS:MORN)
Piotroski F-Score
9 (As of Today)

Good Sign:

Piotroski F-Score of 9 is 9, 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

Morningstar Inc has an F-score of 9. It is a good or high score, which usually indicates a very healthy situation.

MORN' s 10-Year Piotroski F-Score Range
Min: 4   Max: 9
Current: 9

4
9

During the past 13 years, the highest Piotroski F-Score of Morningstar Inc 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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was 30.18 + 31.514 + 29.7 + 32.2 = $123.6 Mil.
Cash Flow from Operations was 8.588 + 56.933 + 35 + 75.9 = $176.4 Mil.
Revenue was 193.106 + 196.415 + 189.8 + 202.1 = $781.4 Mil.
Gross Profit was 112.964 + 115.02 + 111.1 + 118.9 = $458.0 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(1051.223 + 1020.175 + 1019.281 + 1025.8 + 1047.6) / 5 = $1032.8158 Mil.
Total Assets at the begining of this year (Jun14) was $1,051.2 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $435.4 Mil.
Total Current Liabilities was $305.0 Mil.
Net Income was 31.463 + 31.327 + 26.4 + -9.8 = $79.4 Mil.

Revenue was 173.482 + 180.5 + 181.2 + 189.4 = $724.6 Mil.
Gross Profit was 101.06 + 107.562 + 105.4 + 107.9 = $421.9 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(1039.057 + 1074.15 + 1030.668 + 1007.417 + 1051.223) / 5 = $1040.503 Mil.
Total Assets at the begining of last year (Jun13) was $1,039.1 Mil.
Long-Term Debt was $0.0 Mil.
Total Current Assets was $402.6 Mil.
Total Current Liabilities was $322.2 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.

Morningstar Inc's current net income (TTM) was 123.6. ==> 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.

Morningstar Inc's current cash flow from operations (TTM) was 176.4. ==> 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 (Jun14)
=123.594/1051.223
=0.11757163

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=79.39/1039.057
=0.07640582

Morningstar Inc's return on assets of this year was 0.11757163. Morningstar Inc's return on assets of last year was 0.07640582. ==> 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.

Morningstar Inc's current net income (TTM) was 123.6. Morningstar Inc's current cash flow from operations (TTM) was 176.4. ==> 176.4 > 123.6 ==> 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: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=0/1032.8158
=0

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=0/1040.503
=0

Morningstar Inc's gearing of this year was 0. Morningstar Inc's gearing of last year was 0. ==> 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: Jun15)=Total Current Assets/Total Current Liabilities
=435.4/305
=1.42754098

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=402.585/322.188
=1.24953443

Morningstar Inc's current ratio of this year was 1.42754098. Morningstar Inc's current ratio of last year was 1.24953443. ==> 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.

Morningstar Inc's number of shares in issue this year was 44.4. Morningstar Inc's number of shares in issue last year was 44.8. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=457.984/781.421
=0.58609124

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=421.922/724.582
=0.5822971

Morningstar Inc's gross margin of this year was 0.58609124. Morningstar Inc's gross margin of last year was 0.5822971. ==> 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 (Jun14)
=781.421/1051.223
=0.74334466

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=724.582/1039.057
=0.69734577

Morningstar Inc's asset turnover of this year was 0.74334466. Morningstar Inc's asset turnover of last year was 0.69734577. ==> 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+1+1+1+1
=9

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

Morningstar Inc has an F-score of 9. 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.

Morningstar Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 111111111
Question 2 111111111
Question 3 100000110
Question 4 111111111
Question 5 111111111
Question 6 011101000
Question 7 000001111
Question 8 111000000
Question 9 000010011
F-score 666556676

Morningstar Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1111111111
Question 2 1111111111
Question 3 1111100001
Question 4 1111111111
Question 5 1111111111
Question 6 0010000001
Question 7 1111111111
Question 8 0000000001
Question 9 0111111111
F-score 6787766669
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GuruFocus Premium Plus Membership

FEEDBACK