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ArcelorMittal SA (NYSE:MT)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

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

MT' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 3

2
8

During the past 13 years, the highest Piotroski F-Score of ArcelorMittal SA was 8. The lowest was 2. 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 local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Net Income was -6686 + -416 + 1112 + 680 = $-5,310 Mil.
Cash Flow from Operations was 1574 + -690 + 869 + 876 = $2,629 Mil.
Revenue was 13981 + 13399 + 14743 + 14523 = $56,646 Mil.
Gross Profit was -48784 + 13399 + 14743 + 13830 = $-6,812 Mil.
Average Total Assets from the begining of this year (Sep15)
to the end of this year (Sep16) was
(85590 + 76846 + 76559 + 75019 + 75035) / 5 = $77809.8 Mil.
Total Assets at the begining of this year (Sep15) was $85,590 Mil.
Long-Term Debt was $12,632 Mil.
Total Current Assets was $20,969 Mil.
Total Current Liabilities was $16,519 Mil.
Net Income was -955 + -728 + 179 + -711 = $-2,215 Mil.

Revenue was 18723 + 17118 + 16890 + 15589 = $68,320 Mil.
Gross Profit was 17741 + 17118 + 16070 + 14785 = $65,714 Mil.
Average Total Assets from the begining of last year (Sep14)
to the end of last year (Sep15) was
(104073 + 99179 + 88517 + 91932 + 85590) / 5 = $93858.2 Mil.
Total Assets at the begining of last year (Sep14) was $104,073 Mil.
Long-Term Debt was $17,932 Mil.
Total Current Assets was $23,765 Mil.
Total Current Liabilities was $17,701 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.

ArcelorMittal SA's current net income (TTM) was -5,310. ==> Negative ==> Score 0.

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.

ArcelorMittal SA's current cash flow from operations (TTM) was 2,629. ==> 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)
=-5310/85590
=-0.06203996

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=-2215/104073
=-0.02128314

ArcelorMittal SA's return on assets of this year was -0.06203996. ArcelorMittal SA's return on assets of last year was -0.02128314. ==> 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.

ArcelorMittal SA's current net income (TTM) was -5,310. ArcelorMittal SA's current cash flow from operations (TTM) was 2,629. ==> 2,629 > -5,310 ==> 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
=12632/77809.8
=0.16234459

Gearing (Last Year: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=17932/93858.2
=0.19105416

ArcelorMittal SA's gearing of this year was 0.16234459. ArcelorMittal SA's gearing of last year was 0.19105416. ==> 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
=20969/16519
=1.26938677

Current Ratio (Last Year: Sep15)=Total Current Assets/Total Current Liabilities
=23765/17701
=1.34257952

ArcelorMittal SA's current ratio of this year was 1.26938677. ArcelorMittal SA's current ratio of last year was 1.34257952. ==> 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.

ArcelorMittal SA's number of shares in issue this year was 3063. ArcelorMittal SA's number of shares in issue last year was 2318. ==> 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
=-6812/56646
=-0.12025562

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=65714/68320
=0.96185597

ArcelorMittal SA's gross margin of this year was -0.12025562. ArcelorMittal SA's gross margin of last year was 0.96185597. ==> 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 (Sep15)
=56646/85590
=0.66182965

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=68320/104073
=0.65646229

ArcelorMittal SA's asset turnover of this year was 0.66182965. ArcelorMittal SA's asset turnover of last year was 0.65646229. ==> 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
=0+1+0+1+1+0+0+0+1
=4

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

ArcelorMittal SA 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 local exchange's currency.

ArcelorMittal SA Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111110000
Question 2 1111111111
Question 3 1000100110
Question 4 1111101111
Question 5 0111101100
Question 6 0010010100
Question 7 0010001000
Question 8 0100110110
Question 9 1010110110
F-score 5574754752

ArcelorMittal SA Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Question 1 0000000000
Question 2 1111111111
Question 3 1111100000
Question 4 1111111111
Question 5 1100000011
Question 6 0001110000
Question 7 0001100100
Question 8 1111110000
Question 9 1111000001
F-score 6657642334
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