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Motorola Solutions Inc (NYSE:MSI)
Piotroski F-Score
4 (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

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

MSI' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 4

1
8

During the past 13 years, the highest Piotroski F-Score of Motorola Solutions Inc was 8. The lowest was 1. And the median was 5.


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 147 + 201 + 74 + 142 = $564 Mil.
Cash Flow from Operations was -204 + -605 + 151 + 140 = $-518 Mil.
Revenue was 1436 + 1823 + 1223 + 1368 = $5,850 Mil.
Gross Profit was 685 + 912 + 548 + 648 = $2,793 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(11868 + 12195 + 10423 + 9425 + 9160) / 5 = $10614.2 Mil.
Total Assets at the begining of this year (Jun14) was $11,868 Mil.
Long-Term Debt was $3,393 Mil.
Total Current Assets was $5,632 Mil.
Total Current Liabilities was $1,971 Mil.
Net Income was 307 + 342 + 127 + 824 = $1,600 Mil.

Revenue was 1517 + 1817 + 1228 + 1393 = $5,955 Mil.
Gross Profit was 765 + 901 + 577 + 656 = $2,899 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(12160 + 12058 + 11851 + 11615 + 11868) / 5 = $11910.4 Mil.
Total Assets at the begining of last year (Jun13) was $12,160 Mil.
Long-Term Debt was $2,446 Mil.
Total Current Assets was $7,066 Mil.
Total Current Liabilities was $2,924 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.

Motorola Solutions Inc's current net income (TTM) was 564. ==> 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.

Motorola Solutions Inc's current cash flow from operations (TTM) was -518. ==> Negative ==> Score 0.

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.

Motorola Solutions Inc's return on assets of this year was 0.04752275. Motorola Solutions Inc's return on assets of last year was 0.13157895. ==> 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.

Motorola Solutions Inc's current net income (TTM) was 564. Motorola Solutions Inc's current cash flow from operations (TTM) was -518. ==> -518 <= 564 ==> CFROA <= ROA ==> Score 0.

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
=3393/10614.2
=0.31966611

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=2446/11910.4
=0.20536674

Motorola Solutions Inc's gearing of this year was 0.31966611. Motorola Solutions Inc's gearing of last year was 0.20536674. ==> Last year is lower than this year ==> Score 0.

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
=5632/1971
=2.85743278

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=7066/2924
=2.41655267

Motorola Solutions Inc's current ratio of this year was 2.85743278. Motorola Solutions Inc's current ratio of last year was 2.41655267. ==> 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.

Motorola Solutions Inc's number of shares in issue this year was 209.5. Motorola Solutions Inc's number of shares in issue last year was 256.2. ==> 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
=2793/5850
=0.4774359

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2899/5955
=0.4868178

Motorola Solutions Inc's gross margin of this year was 0.4774359. Motorola Solutions Inc's gross margin of last year was 0.4868178. ==> Last year's gross margin is higher ==> Score 0.

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)
=5850/11868
=0.49292214

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=5955/12160
=0.48972039

Motorola Solutions Inc's asset turnover of this year was 0.49292214. Motorola Solutions Inc's asset turnover of last year was 0.48972039. ==> 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+0+0+0+0+1+1+0+1
=4

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

Motorola Solutions 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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Motorola Solutions Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1100011111
Question 2 1111111110
Question 3 1000111111
Question 4 0011110100
Question 5 1100011000
Question 6 1000111001
Question 7 0111001111
Question 8 0001111000
Question 9 1100001100
F-score 6534578644

Motorola Solutions Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1111111111
Question 2 1111111000
Question 3 1111111110
Question 4 1000000000
Question 5 0000000000
Question 6 1100001111
Question 7 1111111111
Question 8 0000000000
Question 9 1110000011
F-score 7654445454
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