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

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 5 indicating the company's financial situation is typical for a stable company.

NFX' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 5

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 local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was -624 + -667 + 48 + 13 = $-1,230 Mil.
Cash Flow from Operations was 72 + 306 + 209 + 239 = $826 Mil.
Revenue was 284 + 381 + 392 + 415 = $1,472 Mil.
Gross Profit was 150 + 242 + 248 + 274 = $914 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(4768 + 4777 + 4285 + 4213 + 4312) / 5 = $4471 Mil.
Total Assets at the begining of this year (Dec15) was $4,768 Mil.
Long-Term Debt was $2,431 Mil.
Total Current Assets was $949 Mil.
Total Current Liabilities was $684 Mil.
Net Income was -480 + -992 + -1227 + -663 = $-3,362 Mil.

Revenue was 349 + 469 + 377 + 362 = $1,557 Mil.
Gross Profit was 212 + 327 + 241 + 234 = $1,014 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(9580 + 9678 + 7458 + 5513 + 4768) / 5 = $7399.4 Mil.
Total Assets at the begining of last year (Dec14) was $9,580 Mil.
Long-Term Debt was $2,467 Mil.
Total Current Assets was $625 Mil.
Total Current Liabilities was $647 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.

Newfield Exploration Co's current net income (TTM) was -1,230. ==> Negative ==> Score 0.

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.

Newfield Exploration Co's current cash flow from operations (TTM) was 826. ==> 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 (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=-3362/9580
=-0.35093946

Newfield Exploration Co's return on assets of this year was -0.2579698. Newfield Exploration Co's return on assets of last year was -0.35093946. ==> This year is higher. ==> Score 1.

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.

Newfield Exploration Co's current net income (TTM) was -1,230. Newfield Exploration Co's current cash flow from operations (TTM) was 826. ==> 826 > -1,230 ==> 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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=2431/4471
=0.54372624

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=2467/7399.4
=0.33340541

Newfield Exploration Co's gearing of this year was 0.54372624. Newfield Exploration Co's gearing of last year was 0.33340541. ==> Last year is lower than this year ==> Score 0.

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: Dec16)=Total Current Assets/Total Current Liabilities
=949/684
=1.3874269

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=625/647
=0.96599691

Newfield Exploration Co's current ratio of this year was 1.3874269. Newfield Exploration Co's current ratio of last year was 0.96599691. ==> 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.

Newfield Exploration Co's number of shares in issue this year was 200. Newfield Exploration Co's number of shares in issue last year was 159. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=914/1472
=0.62092391

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1014/1557
=0.65125241

Newfield Exploration Co's gross margin of this year was 0.62092391. Newfield Exploration Co's gross margin of last year was 0.65125241. ==> Last year's gross margin is higher ==> Score 0.

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 (Dec15)
=1472/4768
=0.30872483

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=1557/9580
=0.1625261

Newfield Exploration Co's asset turnover of this year was 0.30872483. Newfield Exploration Co's asset turnover of last year was 0.1625261. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

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

Newfield Exploration Co 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 local exchange's currency.

Newfield Exploration Co Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 1001101100
Question 2 1111111111
Question 3 0001001101
Question 4 1111111111
Question 5 1000010100
Question 6 1100110111
Question 7 0100010000
Question 8 0000010100
Question 9 0101001101
F-score 5525465835

Newfield Exploration Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1110000000
Question 2 1111111111
Question 3 1100000001
Question 4 1111111111
Question 5 1111100000
Question 6 1111011011
Question 7 0000000000
Question 8 1100000010
Question 9 1100000011
F-score 8854333255
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