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Newfield Exploration Co (NYSE:NFX)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, 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

Newfield Exploration Co has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

NFX' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 8

2
8

During the past 13 years, the highest Piotroski F-Score of Newfield Exploration Co 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 own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 17 + 284 + -22 + 278 = $557 Mil.
Cash Flow from Operations was 350 + 365 + 368 + 337 = $1,420 Mil.
Revenue was 498 + 553 + 608 + 610 = $2,269 Mil.
Gross Profit was 369 + 417 + 460 + 453 = $1,699 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(8743 + 9321 + 8651 + 8956 + 9068) / 5 = $8947.8 Mil.
Total Assets at the begining of this year (Sep13) was $8,743 Mil.
Long-Term Debt was $3,046 Mil.
Total Current Assets was $906 Mil.
Total Current Liabilities was $925 Mil.
Net Income was -1402 + -8 + 111 + 27 = $-1,272 Mil.

Revenue was 352 + 370 + 435 + 486 = $1,643 Mil.
Gross Profit was -121 + 270 + 307 + 363 = $819 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(9431 + 7912 + 7928 + 8381 + 8743) / 5 = $8479 Mil.
Total Assets at the begining of last year (Sep12) was $9,431 Mil.
Long-Term Debt was $3,485 Mil.
Total Current Assets was $773 Mil.
Total Current Liabilities was $1,076 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.

Newfield Exploration Co's current net income (TTM) was 557. ==> 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.

Newfield Exploration Co's current cash flow from operations (TTM) was 1,420. ==> 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 (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=-1272/9431
=-0.13487435

Newfield Exploration Co's return on assets of this year was 0.06370811. Newfield Exploration Co's return on assets of last year was -0.13487435. ==> 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.

Newfield Exploration Co's current net income (TTM) was 557. Newfield Exploration Co's current cash flow from operations (TTM) was 1,420. ==> 1,420 > 557 ==> 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
=3046/8947.8
=0.34041887

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=3485/8479
=0.41101545

Newfield Exploration Co's gearing of this year was 0.34041887. Newfield Exploration Co's gearing of last year was 0.41101545. ==> This year is lower or equal to last year. ==> Score 1.

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
=906/925
=0.97945946

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=773/1076
=0.71840149

Newfield Exploration Co's current ratio of this year was 0.97945946. Newfield Exploration Co's current ratio of last year was 0.71840149. ==> 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.

Newfield Exploration Co's number of shares in issue this year was 138. Newfield Exploration Co's number of shares in issue last year was 136. ==> 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
=1699/2269
=0.74878801

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=819/1643
=0.49847839

Newfield Exploration Co's gross margin of this year was 0.74878801. Newfield Exploration Co's gross margin of last year was 0.49847839. ==> This year's gross margin is higher. ==> Score 1.

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)
=2269/8743
=0.2595219

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=1643/9431
=0.1742127

Newfield Exploration Co's asset turnover of this year was 0.2595219. Newfield Exploration Co's asset turnover of last year was 0.1742127. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+1+0+1+1
=8

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

Newfield Exploration Co has an F-score of 8. 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.

Newfield Exploration Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111001101
Q2 1111111111
Q3 1010001001
Q4 1111111111
Q5 0111010010
Q6 1001100110
Q7 0000100010
Q8 0000000001
Q9 1000101101
F-score 6455535556

Newfield Exploration Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1100001111
Q2 1111111111
Q3 1000001111
Q4 1111111111
Q5 0110100011
Q6 1110000001
Q7 1101001010
Q8 0000001111
Q9 0000001111
F-score 6643327688
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