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Nielsen NV (NYSE:NLSN)
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

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

NLSN' s 10-Year Piotroski F-Score Range
Min: 6   Max: 7
Current: 7

6
7

During the past 7 years, the highest Piotroski F-Score of Nielsen NV was 7. The lowest was 6. 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 (Dec14) TTM:Last Year (Dec13) TTM:
Net Income was 58 + 74 + 91 + 161 = $384 Mil.
Cash Flow from Operations was 90 + 210 + 392 + 401 = $1,093 Mil.
Revenue was 1489 + 1594 + 1572 + 1633 = $6,288 Mil.
Gross Profit was 847 + 917 + 924 + 980 = $3,668 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(15530 + 15473 + 15556 + 15361 + 15376) / 5 = $15459.2 Mil.
Total Assets at the begining of this year (Dec13) was $15,530 Mil.
Long-Term Debt was $6,465 Mil.
Total Current Assets was $2,019 Mil.
Total Current Liabilities was $1,798 Mil.
Net Income was 35 + 426 + 134 + 145 = $740 Mil.

Revenue was 1319 + 1386 + 1387 + 1611 = $5,703 Mil.
Gross Profit was 740 + 806 + 814 + 945 = $3,305 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(14585 + 14416 + 14540 + 15715 + 15530) / 5 = $14957.2 Mil.
Total Assets at the begining of last year (Dec12) was $14,585 Mil.
Long-Term Debt was $6,492 Mil.
Total Current Assets was $2,134 Mil.
Total Current Liabilities was $1,535 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.

Nielsen NV's current net income (TTM) was 384. ==> 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.

Nielsen NV's current cash flow from operations (TTM) was 1,093. ==> 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.

Nielsen NV's return on assets of this year was 0.02472634. Nielsen NV's return on assets of last year was 0.05073706. ==> Last year is higher ==> Score 0.

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.

Nielsen NV's current net income (TTM) was 384. Nielsen NV's current cash flow from operations (TTM) was 1,093. ==> 1,093 > 384 ==> 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: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=6465/15459.2
=0.41819758

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=6492/14957.2
=0.43403846

Nielsen NV's gearing of this year was 0.41819758. Nielsen NV's gearing of last year was 0.43403846. ==> This year is lower or equal to last year. ==> Score 1.

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: Dec14)=Total Current Assets/Total Current Liabilities
=2019/1798
=1.12291435

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=2134/1535
=1.39022801

Nielsen NV's current ratio of this year was 1.12291435. Nielsen NV's current ratio of last year was 1.39022801. ==> Last year's current ratio is higher ==> Score 0.

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.

Nielsen NV's number of shares in issue this year was 382. Nielsen NV's number of shares in issue last year was 384.3. ==> 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
=3668/6288
=0.58333333

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3305/5703
=0.57951955

Nielsen NV's gross margin of this year was 0.58333333. Nielsen NV's gross margin of last year was 0.57951955. ==> 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 (Dec13)
=6288/15530
=0.40489375

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=5703/14585
=0.39101817

Nielsen NV's asset turnover of this year was 0.40489375. Nielsen NV's asset turnover of last year was 0.39101817. ==> 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
=1+1+0+1+1+0+1+1+1
=7

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

Nielsen NV 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.

Nielsen NV Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 111
Question 2 111
Question 3 110
Question 4 111
Question 5 101
Question 6 010
Question 7 000
Question 8 001
Question 9 011
F-score 566

Nielsen NV Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1101111000
Question 4 1111111111
Question 5 1111000011
Question 6 0011111010
Question 7 0100000001
Question 8 0000000001
Question 9 0001111111
F-score 5657666467
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