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Nike Inc (NYSE:NKE)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

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

Nike Inc has an F-score of 7 indicating the company's financial situation is typical for a stable company.

NKE' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Nike Inc was 9. The lowest was 3. And the median was 6.


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 (Aug14) TTM:Last Year (Aug13) TTM:
Net Income was 537 + 685 + 691 + 962 = $2,875 Mil.
Cash Flow from Operations was 311 + 754 + 1320 + 588 = $2,973 Mil.
Revenue was 6431 + 6972 + 7425 + 7982 = $28,810 Mil.
Gross Profit was 2826 + 3103 + 3385 + 3721 = $13,035 Mil.
Average Total Assets from the begining of this year (Aug13)
to the end of this year (Aug14) was
(17674 + 17820 + 17803 + 18594 + 18521) / 5 = $18,082 Mil.
Total Assets was $18,521 Mil.
Long-Term Debt was $1,195 Mil.
Total Current Assets was $13,540 Mil.
Total Current Liabilities was $4,813 Mil.
Net Income was 384 + 866 + 655 + 779 = $2,684 Mil.

Revenue was 5955 + 6187 + 6697 + 6971 = $25,810 Mil.
Gross Profit was 2530 + 2736 + 2940 + 3132 = $11,338 Mil.
Average Total Assets from the begining of last year (Aug12)
to the end of last year (Aug13) was
(15114 + 15171 + 15615 + 17545 + 17674) / 5 = $16,224 Mil.
Total Assets was $17,674 Mil.
Long-Term Debt was $1,207 Mil.
Total Current Assets was $13,618 Mil.
Total Current Liabilities was $3,863 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Nike Inc's current net income (ttm) was 2,875. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Nike Inc's current cash flow from operations (ttm) was 2,973. ==> 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 (TTM)/Average Total Assets from Aug13 to Aug14
=2875/18082.4
=0.15899438

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Aug12 to Aug13
=2684/16223.8
=0.16543596

Nike Inc's return on assets of this year was 0.15899438. Nike Inc's return on assets of last year was 0.16543596. ==> 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.

Nike Inc's current net income (ttm) was 2,875. Nike Inc's current cash flow from operations (ttm) was 2,973. ==> 2,973 > 2,875 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Aug14)=Long-Term Debt/Total Assets
=1195/18521
=0.06452135

Gearing (Last Year: Aug13)=Long-Term Debt/Total Assets
=1207/17674
=0.06829241

Nike Inc's gearing of this year was 0.06452135. Nike Inc's gearing of last year was 0.06829241. ==> 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: Aug14)=Total Current Assets/Total Current Liabilities
=13540/4813
=2.81321421

Current Ratio (Last Year: Aug13)=Total Current Assets/Total Current Liabilities
=13618/3863
=3.52523945

Nike Inc's current ratio of this year was 2.81321421. Nike Inc's current ratio of last year was 3.52523945. ==> 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.

Nike Inc's number of shares in issue this year was 886.2. Nike Inc's number of shares in issue last year was 910.7. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=13035/28810
=0.45244707

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=11338/25810
=0.4392871

Nike Inc's gross margin of this year was 0.45244707. Nike Inc's gross margin of last year was 0.4392871. ==> 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 average total assets throughout 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)/Average Total Assets from Aug13 to Aug14
=28810/18082.4
=1.59326196

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Aug12 to Aug13
=25810/16223.8
=1.59087267

Nike Inc's asset turnover of this year was 1.59326196. Nike Inc's asset turnover of last year was 1.59087267. ==> 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+1+0+1+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Nike Inc has an F-score of 7 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, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Nike Inc Annual Data

May05May06May07May08May09May10May11May12May13May14
Q1 1111111111
Q2 1111111111
Q3 1111011111
Q4 1111110011
Q5 1111111101
Q6 1010110110
Q7 0111101111
Q8 1001010011
Q9 1111111111
F-score 8788786788

Nike Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
Q1 111111111
Q2 111111111
Q3 001111000
Q4 011110111
Q5 111000011
Q6 101111100
Q7 111111111
Q8 000111111
Q9 011100001
F-score 5668876667
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