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Novagold Resources Inc (AMEX:NG)
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 = 8 or 9
Bad or low score = 0 or 1

Novagold Resources Inc has an F-score of 3 indicating the company's financial situation is typical for a stable company.

NG' s 10-Year Piotroski F-Score Range
Min: 1   Max: 7
Current: 3

1
7

During the past 13 years, the highest Piotroski F-Score of Novagold Resources Inc was 7. The lowest was 1. And the median was 3.


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 (May14) TTM:Last Year (May13) TTM:
Net Income was -10.681 + -10.691 + -20.349 + -19.599 = $-61.32 Mil.
Cash Flow from Operations was -0.474 + -5.214 + 9.731 + -8.988 = $-4.95 Mil.
Revenue was 0 + 0 + 0 + 0 = $0.00 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0.00 Mil.
Total Assets at the begining of this year (May13) was $603.58 Mil.
Total Assets was $555.22 Mil.
Long-Term Debt was $74.17 Mil.
Total Current Assets was $180.10 Mil.
Total Current Liabilities was $17.03 Mil.
Net Income was -9.833 + -13.776 + -102.006 + -21.607 = $-147.22 Mil.

Revenue was 0 + 0 + 0 + 0 = $0.00 Mil.
Gross Profit was 0 + 0 + 1.749 + -0.094 = $1.66 Mil.
Total Assets at the begining of last year (May12) was $704.17 Mil.
Total Assets was $603.58 Mil.
Long-Term Debt was $88.20 Mil.
Total Current Assets was $218.88 Mil.
Total Current Liabilities was $3.31 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.

Novagold Resources Inc's current net income was -61.32. ==> Negative ==> Score 0.

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.

Novagold Resources Inc's current cash flow from operations was -4.95. ==> Negative ==> Score 0.

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 (May13)
=-61.32/603.582
=-0.10159349

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (May12)
=-147.222/704.166
=-0.20907286

Novagold Resources Inc's return on assets of this year was -0.10159349. Novagold Resources Inc's return on assets of last year was -0.20907286. ==> 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.

Novagold Resources Inc's current net income was -61.32. Novagold Resources Inc's current cash flow from operations was -4.95. ==> -4.95 > -61.32 ==> 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
=74.174/555.224
=0.13359293

Gearing (Last Year)=Long-Term Debt/Total Assets
=88.199/603.582
=0.14612596

Novagold Resources Inc's gearing of this year was 0.13359293. Novagold Resources Inc's gearing of last year was 0.14612596. ==> 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)=Total Current Assets/Total Current Liabilities
=180.098/17.033
=10.57347502

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=218.882/3.309
=66.14747658

Novagold Resources Inc's current ratio of this year was 10.57347502. Novagold Resources Inc's current ratio of last year was 66.14747658. ==> 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.

Novagold Resources Inc's number of shares in issue this year was 317.3. Novagold Resources Inc's number of shares in issue last year was 316.6. ==> 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
=0/0
=

Gross Margin (Last Year)=Gross Profit/Revenue
=1.655/0
=

Novagold Resources Inc's gross margin of this year was . Novagold Resources Inc's gross margin of last year was . ==> Last year's gross margin is higher ==> Score 0.

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 (May13)
=0/603.582
=0

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (May12)
=0/704.166
=0

Novagold Resources Inc's asset turnover of this year was 0. Novagold Resources Inc's asset turnover of last year was 0. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Novagold Resources Inc has an F-score of 3 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.

Novagold Resources Inc Annual Data

Nov04Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13
Q1 0000000000
Q2 0000000000
Q3 1101010110
Q4 1010111001
Q5 1111010010
Q6 0000011011
Q7 0000000000
Q8 1011000000
Q9 1010000000
F-score 5243142132

Novagold Resources Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Q1 0110000000
Q2 0000000000
Q3 1111100001
Q4 0000111111
Q5 0011110001
Q6 1111011110
Q7 0000000000
Q8 1100000000
Q9 0010000000
F-score 3453332223
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