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

Nike Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

NKE' s Piotroski F-Score Range Over the Past 10 Years
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 7.


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 (Nov15) TTM:Last Year (Nov14) TTM:
Net Income was 791 + 0 + 1179 + 785 = $2,755 Mil.
Cash Flow from Operations was 1791 + 1342 + 491 + 545 = $4,169 Mil.
Revenue was 7460 + 0 + 8414 + 7686 = $23,560 Mil.
Gross Profit was 3426 + 0 + 3995 + 3501 = $10,922 Mil.
Average Total Assets from the begining of this year (Nov14)
to the end of this year (Nov15) was
(19167 + 20541 + 21600 + 20766 + 22583) / 5 = $20931.4 Mil.
Total Assets at the begining of this year (Nov14) was $19,167 Mil.
Long-Term Debt was $2,067 Mil.
Total Current Assets was $16,755 Mil.
Total Current Liabilities was $5,511 Mil.
Net Income was 682 + 0 + 962 + 655 = $2,299 Mil.

Revenue was 6972 + 0 + 7982 + 7380 = $22,334 Mil.
Gross Profit was 3103 + 0 + 3721 + 3327 = $10,151 Mil.
Average Total Assets from the begining of last year (Nov13)
to the end of last year (Nov14) was
(17820 + 17803 + 18594 + 18521 + 19167) / 5 = $18381 Mil.
Total Assets at the begining of last year (Nov13) was $17,820 Mil.
Long-Term Debt was $1,084 Mil.
Total Current Assets was $14,033 Mil.
Total Current Liabilities was $4,937 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.

Nike Inc's current net income (TTM) was 2,755. ==> Positive ==> Score 1.

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.

Nike Inc's current cash flow from operations (TTM) was 4,169. ==> 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.

Nike Inc's return on assets of this year was 0.14373663. Nike Inc's return on assets of last year was 0.12901235. ==> 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.

Nike Inc's current net income (TTM) was 2,755. Nike Inc's current cash flow from operations (TTM) was 4,169. ==> 4,169 > 2,755 ==> 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: Nov15)=Long-Term Debt/Average Total Assets from Nov14 to Nov15
=2067/20931.4
=0.09875116

Gearing (Last Year: Nov14)=Long-Term Debt/Average Total Assets from Nov13 to Nov14
=1084/18381
=0.05897394

Nike Inc's gearing of this year was 0.09875116. Nike Inc's gearing of last year was 0.05897394. ==> 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: Nov15)=Total Current Assets/Total Current Liabilities
=16755/5511
=3.04028307

Current Ratio (Last Year: Nov14)=Total Current Assets/Total Current Liabilities
=14033/4937
=2.84241442

Nike Inc's current ratio of this year was 3.04028307. Nike Inc's current ratio of last year was 2.84241442. ==> 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.

Nike Inc's number of shares in issue this year was 1751.4. Nike Inc's number of shares in issue last year was 1769.6. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=10922/23560
=0.46358234

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=10151/22334
=0.45450882

Nike Inc's gross margin of this year was 0.46358234. Nike Inc's gross margin of last year was 0.45450882. ==> This year's gross margin is higher. ==> Score 1.

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 (Nov14)
=23560/19167
=1.22919601

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Nov13)
=22334/17820
=1.25331089

Nike Inc's asset turnover of this year was 1.22919601. Nike Inc's asset turnover of last year was 1.25331089. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

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

Nike Inc has an F-score of 7. 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.

Nike Inc Annual Data

May06May07May08May09May10May11May12May13May14May15
Question 1 1111111111
Question 2 1111111111
Question 3 1010111101
Question 4 1111111111
Question 5 1111111011
Question 6 0101101100
Question 7 1111011111
Question 8 0011110011
Question 9 0010001101
F-score 6687778768

Nike Inc Quarterly Data

Aug13Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15
Question 1 1111111111
Question 2 1111111111
Question 3 1110001111
Question 4 1111111111
Question 5 0001111110
Question 6 1110000011
Question 7 1111111111
Question 8 1111111111
Question 9 1110000110
F-score 8886667897
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