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National Financial Partners Corporation (NYSE:NFP)
Piotroski F-Score
0 (As of Today)

The zones of discrimination were as such:

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

National Financial Partners Corporation has an F-score of 6 indicating the company's financial situation is typical for a stable company.

NFP' s 10-Year Piotroski F-Score Range
Min: 0   Max: 0
Current: 0


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 (Mar13) TTM:Last Year (Mar12) TTM:
Net Income was 4.151 + 19.403 + 0.051 + 4.866 = $28 Mil.
Cash Flow from Operations was 21.174 + 14.543 + 33.599 + 19.519 = $89 Mil.
Revenue was 263.471 + 300.135 + 252.036 + 255.436 = $1,071 Mil.
Gross Profit was 182.457 + 215.097 + 175.867 + 176.463 = $750 Mil.
Total Assets at the begining of this year (Mar12) was $856 Mil.
Total Assets was $889 Mil.
Long-Term Debt was $222 Mil.
Total Current Assets was $339 Mil.
Total Current Liabilities was $183 Mil.
Net Income was 5.618 + 11.245 + 9.321 + 9.49 = $36 Mil.

Revenue was 254.131 + 289.162 + 251.531 + 239.435 = $1,034 Mil.
Gross Profit was 171.981 + 195.266 + 171.234 + 162.547 = $701 Mil.
Total Assets at the begining of last year (Mar11) was $843 Mil.
Total Assets was $856 Mil.
Long-Term Debt was $199 Mil.
Total Current Assets was $306 Mil.
Total Current Liabilities was $178 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.

National Financial Partners Corporation's current net income was 28. ==> 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.

National Financial Partners Corporation's current cash flow from operations was 89. ==> 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 (Mar12)
=28.471/855.678
=0.03327303

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar11)
=35.674/843.281
=0.04230381

National Financial Partners Corporation's return on assets of this year was 0.03327303. National Financial Partners Corporation's return on assets of last year was 0.04230381. ==> 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.

National Financial Partners Corporation's current net income was 28. National Financial Partners Corporation's current cash flow from operations was 89. ==> 89 > 28 ==> 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)=Long-Term Debt/Total Assets
=221.688/889.335
=0.2492739

Gearing (Last Year)=Long-Term Debt/Total Assets
=198.669/855.678
=0.23217729

National Financial Partners Corporation's gearing of this year was 0.2492739. National Financial Partners Corporation's gearing of last year was 0.23217729. ==> 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
=338.944/183.339
=1.84872831

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=306.419/177.676
=1.72459421

National Financial Partners Corporation's current ratio of this year was 1.84872831. National Financial Partners Corporation's current ratio of last year was 1.72459421. ==> 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.

National Financial Partners Corporation's number of shares in issue this year was 45.3. National Financial Partners Corporation's number of shares in issue last year was 42.6. ==> 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
=749.884/1071.078
=0.70012081

Gross Margin (Last Year)=Gross Profit/Revenue
=701.028/1034.259
=0.67780701

National Financial Partners Corporation's gross margin of this year was 0.70012081. National Financial Partners Corporation's gross margin of last year was 0.67780701. ==> 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 (Mar12)
=1071.078/855.678
=1.25173021

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar11)
=1034.259/843.281
=1.22647018

National Financial Partners Corporation's asset turnover of this year was 1.25173021. National Financial Partners Corporation's asset turnover of last year was 1.22647018. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+1+0+1+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

National Financial Partners Corporation has an F-score of 6 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.

National Financial Partners Corporation Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
Q1 111110111
Q2 111111111
Q3 110000100
Q4 111111111
Q5 111000010
Q6 000101101
Q7 000100011
Q8 000100101
Q9 110000111
F-score 664633767

National Financial Partners Corporation Quarterly Data

Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13
Q1 1111111111
Q2 1111111111
Q3 1111000000
Q4 1111111111
Q5 0011100000
Q6 1101000011
Q7 0001111100
Q8 1111101111
Q9 1111111111
F-score 7779756666
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