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Murphy Oil Corp (NYSE:MUR)
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

Murphy Oil Corp has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

MUR' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Murphy Oil Corp was 9. 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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was 245.707 + 375.238 + -14.441 + -73.834 = $533 Mil.
Cash Flow from Operations was 898.851 + 694.622 + 533.844 + 181.367 = $2,309 Mil.
Revenue was 1433.037 + 1407.626 + 921.747 + 738.29 = $4,501 Mil.
Gross Profit was 1050.086 + 1008.487 + 689.326 + 491.758 = $3,240 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(17873.934 + 17845.766 + 16742.307 + 15160.837 + 15149.964) / 5 = $16554.5616 Mil.
Total Assets at the begining of this year (Jun14) was $17,874 Mil.
Long-Term Debt was $3,265 Mil.
Total Current Assets was $2,499 Mil.
Total Current Liabilities was $1,807 Mil.
Net Income was 284.809 + 75.421 + 155.253 + 129.412 = $645 Mil.

Revenue was 1419.496 + 1347.669 + 1286.4 + 1349.021 = $5,403 Mil.
Gross Profit was 1013.127 + 785.274 + 1024.145 + 1034.263 = $3,857 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(18824.975 + 17491.086 + 17509.484 + 17551.138 + 17873.934) / 5 = $17850.1234 Mil.
Total Assets at the begining of last year (Jun13) was $18,825 Mil.
Long-Term Debt was $3,786 Mil.
Total Current Assets was $3,233 Mil.
Total Current Liabilities was $2,851 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.

Murphy Oil Corp's current net income (TTM) was 533. ==> 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.

Murphy Oil Corp's current cash flow from operations (TTM) was 2,309. ==> 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)
=532.67/17873.934
=0.0298015

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=644.895/18824.975
=0.03425742

Murphy Oil Corp's return on assets of this year was 0.0298015. Murphy Oil Corp's return on assets of last year was 0.03425742. ==> 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.

Murphy Oil Corp's current net income (TTM) was 533. Murphy Oil Corp's current cash flow from operations (TTM) was 2,309. ==> 2,309 > 533 ==> 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
=3264.868/16554.5616
=0.19721863

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=3786.494/17850.1234
=0.21212705

Murphy Oil Corp's gearing of this year was 0.19721863. Murphy Oil Corp's gearing of last year was 0.21212705. ==> 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
=2499.433/1806.788
=1.3833571

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=3232.933/2850.521
=1.13415512

Murphy Oil Corp's current ratio of this year was 1.3833571. Murphy Oil Corp's current ratio of last year was 1.13415512. ==> 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.

Murphy Oil Corp's number of shares in issue this year was 174.5. Murphy Oil Corp's number of shares in issue last year was 180. ==> 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
=3239.657/4500.7
=0.71981181

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3856.809/5402.586
=0.71388202

Murphy Oil Corp's gross margin of this year was 0.71981181. Murphy Oil Corp's gross margin of last year was 0.71388202. ==> 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)
=4500.7/17873.934
=0.25180243

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=5402.586/18824.975
=0.28699034

Murphy Oil Corp's asset turnover of this year was 0.25180243. Murphy Oil Corp's asset turnover of last year was 0.28699034. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

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

Murphy Oil Corp 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.

Murphy Oil Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1011000100
Question 4 1111111111
Question 5 1001011001
Question 6 1101101000
Question 7 0001000111
Question 8 1001001111
Question 9 1111001001
F-score 8559447657

Murphy Oil Corp Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1111111111
Question 2 1111111111
Question 3 1110000000
Question 4 1111111111
Question 5 0000000111
Question 6 1000001011
Question 7 1111111111
Question 8 1111100111
Question 9 0000011100
F-score 7665556777
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