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NCR Corp (NYSE:NCR)
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

NCR Corp has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

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

3
9

During the past 13 years, the highest Piotroski F-Score of NCR 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 198 + 53 + 90 + 15 = $356 Mil.
Cash Flow from Operations was 265 + 31 + 80 + 124 = $500 Mil.
Revenue was 1670 + 1518 + 1658 + 1647 = $6,493 Mil.
Gross Profit was 530 + 416 + 480 + 404 = $1,830 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(6878 + 8108 + 8828 + 8849 + 8610) / 5 = $8254.6 Mil.
Total Assets at the begining of this year (Sep13) was $6,878 Mil.
Long-Term Debt was $3,660 Mil.
Total Current Assets was $3,212 Mil.
Total Current Liabilities was $2,008 Mil.
Net Income was 242 + 61 + 86 + 98 = $487 Mil.

Revenue was 1642 + 1410 + 1535 + 1508 = $6,095 Mil.
Gross Profit was 574 + 369 + 426 + 415 = $1,784 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(6034 + 6369 + 6655 + 6706 + 6878) / 5 = $6528.4 Mil.
Total Assets at the begining of last year (Sep12) was $6,034 Mil.
Long-Term Debt was $2,212 Mil.
Total Current Assets was $3,242 Mil.
Total Current Liabilities was $1,753 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.

NCR Corp's current net income (TTM) was 356. ==> 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.

NCR Corp's current cash flow from operations (TTM) was 500. ==> 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.

NCR Corp's return on assets of this year was 0.05175923. NCR Corp's return on assets of last year was 0.08070931. ==> Last year is higher ==> Score 0.

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.

NCR Corp's current net income (TTM) was 356. NCR Corp's current cash flow from operations (TTM) was 500. ==> 500 > 356 ==> CFROA > ROA ==> Score 1.

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: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=3660/8254.6
=0.44338914

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=2212/6528.4
=0.33882728

NCR Corp's gearing of this year was 0.44338914. NCR Corp's gearing of last year was 0.33882728. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=3212/2008
=1.59960159

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=3242/1753
=1.84940103

NCR Corp's current ratio of this year was 1.59960159. NCR Corp's current ratio of last year was 1.84940103. ==> 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.

NCR Corp's number of shares in issue this year was 171.3. NCR Corp's number of shares in issue last year was 170. ==> There is larger number of shares in issue this year. ==> Score 0.

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: TTM)=Gross Profit/Revenue
=1830/6493
=0.28184198

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1784/6095
=0.29269893

NCR Corp's gross margin of this year was 0.28184198. NCR Corp's gross margin of last year was 0.29269893. ==> Last year's gross margin is higher ==> Score 0.

Q9. 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 (Sep13)
=6493/6878
=0.94402443

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=6095/6034
=1.01010938

NCR Corp's asset turnover of this year was 0.94402443. NCR Corp's asset turnover of last year was 1.01010938. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+0+0+0+0
=3

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

NCR Corp has an F-score of 3. It is a bad or low score, which usually implies poor business operation.


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.

NCR Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111101111
Q2 1111111101
Q3 1100001010
Q4 1011111100
Q5 1000101000
Q6 0111011011
Q7 1111110100
Q8 0001101110
Q9 0011101100
F-score 6567748643

NCR Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1000011111
Q3 0111110000
Q4 1000000001
Q5 0000000000
Q6 0111111110
Q7 0000000000
Q8 1111110000
Q9 1000010000
F-score 5444463333
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