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

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 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 824 + 127 + 342 + 307 = $1,600 Mil.
Cash Flow from Operations was 84 + 46 + 741 + 303 = $1,174 Mil.
Revenue was 1393 + 1801 + 2504 + 2112 = $7,810 Mil.
Gross Profit was 656 + 845 + 1213 + 1043 = $3,757 Mil.
Total Assets at the begining of this year (Jun13) was $12,160 Mil.
Total Assets was $11,868 Mil.
Long-Term Debt was $2,446 Mil.
Total Current Assets was $7,066 Mil.
Total Current Liabilities was $2,924 Mil.
Net Income was 258 + 192 + 336 + 206 = $992 Mil.

Revenue was 1497 + 1973 + 2441 + 2153 = $8,064 Mil.
Gross Profit was 750 + 955 + 1228 + 1087 = $4,020 Mil.
Total Assets at the begining of last year (Jun12) was $12,193 Mil.
Total Assets was $12,160 Mil.
Long-Term Debt was $2,452 Mil.
Total Current Assets was $6,841 Mil.
Total Current Liabilities was $2,794 Mil.

Profitability

Q1. 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 was 1,600. ==> Positive ==> Score 1.

Q2. 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 was 1,174. ==> 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/Total Assets at the beginning of this year (Jun13)
=1600/12160
=0.13157895

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=992/12193
=0.08135816

Motorola Solutions Inc's return on assets of this year was 0.13157895. Motorola Solutions Inc's return on assets of last year was 0.08135816. ==> 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.

Motorola Solutions Inc's current net income was 1,600. Motorola Solutions Inc's current cash flow from operations was 1,174. ==> 1,174 =< 1,600 ==> CFROA =< ROA ==> Score 0.

Funding

Q5. 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)=Long-Term Debt/Total Assets
=2446/11868
=0.20610044

Gearing (Last Year)=Long-Term Debt/Total Assets
=2452/12160
=0.20164474

Motorola Solutions Inc's gearing of this year was 0.20610044. Motorola Solutions Inc's gearing of last year was 0.20164474. ==> 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)=Total Current Assets/Total Current Liabilities
=7066/2924
=2.41655267

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=6841/2794
=2.44846099

Motorola Solutions Inc's current ratio of this year was 2.41655267. Motorola Solutions Inc's current ratio of last year was 2.44846099. ==> 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.

Motorola Solutions Inc's number of shares in issue this year was 256.2. Motorola Solutions Inc's number of shares in issue last year was 274.7. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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)=Gross Profit/Revenue
=3757/7810
=0.48104994

Gross Margin (Last Year)=Gross Profit/Revenue
=4020/8064
=0.4985119

Motorola Solutions Inc's gross margin of this year was 0.48104994. Motorola Solutions Inc's gross margin of last year was 0.4985119. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Jun13)
=7810/12160
=0.64226974

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=8064/12193
=0.66136308

Motorola Solutions Inc's asset turnover of this year was 0.64226974. Motorola Solutions Inc's asset turnover of last year was 0.66136308. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+0+0+0+1+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1110001111
Q2 1111111111
Q3 1100011111
Q4 1001111010
Q5 1110011100
Q6 1100011100
Q7 0011100011
Q8 1000111100
Q9 1110000011
F-score 8653467665

Motorola Solutions Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1011111111
Q4 0101100000
Q5 1000000000
Q6 0000110000
Q7 1111111111
Q8 1110000000
Q9 0011111100
F-score 6566765544
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