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NCR Corp (NYSE:NCR)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

NCR Corp has an F-score of 5 indicating the company's financial situation is typical for a stable company.

NCR' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 5

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 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 90 + 53 + 198 + 98 = $439 Mil.
Cash Flow from Operations was 80 + 31 + 265 + 27 = $403 Mil.
Revenue was 1658 + 1518 + 1670 + 1508 = $6,354 Mil.
Gross Profit was 480 + 416 + 530 + 415 = $1,841 Mil.
Total Assets at the begining of this year (Jun13) was $6,706 Mil.
Total Assets was $8,849 Mil.
Long-Term Debt was $3,840 Mil.
Total Current Assets was $3,390 Mil.
Total Current Liabilities was $1,976 Mil.
Net Income was 86 + 61 + -20 + 57 = $184 Mil.

Revenue was 1535 + 1410 + 1642 + 1435 = $6,022 Mil.
Gross Profit was 426 + 369 + 332 + 358 = $1,485 Mil.
Total Assets at the begining of last year (Jun12) was $5,623 Mil.
Total Assets was $6,706 Mil.
Long-Term Debt was $2,079 Mil.
Total Current Assets was $3,076 Mil.
Total Current Liabilities was $1,838 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 was 439. ==> 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 was 403. ==> 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)
=439/6706
=0.06546376

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=184/5623
=0.03272275

NCR Corp's return on assets of this year was 0.06546376. NCR Corp's return on assets of last year was 0.03272275. ==> 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.

NCR Corp's current net income was 439. NCR Corp's current cash flow from operations was 403. ==> 403 =< 439 ==> 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
=3840/8849
=0.43394734

Gearing (Last Year)=Long-Term Debt/Total Assets
=2079/6706
=0.31002088

NCR Corp's gearing of this year was 0.43394734. NCR Corp's gearing of last year was 0.31002088. ==> 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
=3390/1976
=1.71558704

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=3076/1838
=1.67355822

NCR Corp's current ratio of this year was 1.71558704. NCR Corp's current ratio of last year was 1.67355822. ==> This year's current ratio is higher. ==> Score 1.

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 170.9. NCR Corp's number of shares in issue last year was 168.8. ==> 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)=Gross Profit/Revenue
=1841/6354
=0.28973875

Gross Margin (Last Year)=Gross Profit/Revenue
=1485/6022
=0.24659582

NCR Corp's gross margin of this year was 0.28973875. NCR Corp's gross margin of last year was 0.24659582. ==> This year's gross margin is higher. ==> Score 1.

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)
=6354/6706
=0.94750969

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=6022/5623
=1.07095856

NCR Corp's asset turnover of this year was 0.94750969. NCR Corp's asset turnover of last year was 1.07095856. ==> 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+1+0+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

NCR Corp has an F-score of 5 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.

NCR Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111101111
Q2 1111111101
Q3 1100001011
Q4 1111111100
Q5 1000101000
Q6 0111011011
Q7 1111110100
Q8 0110101111
Q9 0010101100
F-score 6775748645

NCR Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1100001111
Q3 0011111111
Q4 1100000000
Q5 0000000000
Q6 0011111111
Q7 0000000000
Q8 1111111111
Q9 1100001000
F-score 5544446555
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