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NorthWestern Corp (NYSE:NWE)
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

NorthWestern Corp has an F-score of 5 indicating the company's financial situation is typical for a stable company.

NWE' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 8
Current: 5

1
8

During the past 13 years, the highest Piotroski F-Score of NorthWestern Corp was 8. The lowest was 1. 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 own currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Net Income was 23.798 + 45.013 + 38.054 + 35.569 = $142 Mil.
Cash Flow from Operations was 114.139 + 35.341 + 142.136 + -1.142 = $290 Mil.
Revenue was 272.739 + 324.989 + 332.539 + 293.12 = $1,223 Mil.
Gross Profit was 199.162 + 217.62 + 217.105 + 211.427 = $845 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(5060.068 + 5235.078 + 5278.64 + 5261.173 + 5307.606) / 5 = $5228.513 Mil.
Total Assets at the begining of this year (Jun15) was $5,060 Mil.
Long-Term Debt was $1,799 Mil.
Total Current Assets was $238 Mil.
Total Current Liabilities was $521 Mil.
Net Income was 30.191 + 37.169 + 51.425 + 30.973 = $150 Mil.

Revenue was 251.912 + 312.947 + 346.011 + 270.56 = $1,181 Mil.
Gross Profit was 157.32 + 204.85 + 233.62 + 191.033 = $787 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(3791.777 + 3874.298 + 4973.943 + 4989.091 + 5060.068) / 5 = $4537.8354 Mil.
Total Assets at the begining of last year (Jun14) was $3,792 Mil.
Long-Term Debt was $1,739 Mil.
Total Current Assets was $312 Mil.
Total Current Liabilities was $510 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.

NorthWestern Corp's current net income (TTM) was 142. ==> 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.

NorthWestern Corp's current cash flow from operations (TTM) was 290. ==> 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 (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Jun15)
=142.434/5060.068
=0.02814863

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=149.758/3791.777
=0.03949547

NorthWestern Corp's return on assets of this year was 0.02814863. NorthWestern Corp's return on assets of last year was 0.03949547. ==> 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.

NorthWestern Corp's current net income (TTM) was 142. NorthWestern Corp's current cash flow from operations (TTM) was 290. ==> 290 > 142 ==> 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: Jun16)=Long-Term Debt/Average Total Assets from Jun15 to Jun16
=1799.087/5228.513
=0.34409152

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=1739.389/4537.8354
=0.38330809

NorthWestern Corp's gearing of this year was 0.34409152. NorthWestern Corp's gearing of last year was 0.38330809. ==> 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: Jun16)=Total Current Assets/Total Current Liabilities
=237.991/520.676
=0.45708079

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=312.165/510.022
=0.61206183

NorthWestern Corp's current ratio of this year was 0.45708079. NorthWestern Corp's current ratio of last year was 0.61206183. ==> 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.

NorthWestern Corp's number of shares in issue this year was 48.3. NorthWestern Corp's number of shares in issue last year was 47. ==> 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
=845.314/1223.387
=0.69096206

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=786.823/1181.43
=0.66599206

NorthWestern Corp's gross margin of this year was 0.69096206. NorthWestern Corp's gross margin of last year was 0.66599206. ==> 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 (Jun15)
=1223.387/5060.068
=0.24177284

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=1181.43/3791.777
=0.31157687

NorthWestern Corp's asset turnover of this year was 0.24177284. NorthWestern Corp's asset turnover of last year was 0.31157687. ==> 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+0+1+1+0+0+1+0
=5

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

NorthWestern Corp 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 own currency.

NorthWestern Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 0111111010
Question 4 1111111111
Question 5 0010010001
Question 6 1001101100
Question 7 1001000000
Question 8 0001111011
Question 9 0100000000
F-score 5557666455

NorthWestern Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1111111111
Question 2 1111111111
Question 3 0001111000
Question 4 1111111111
Question 5 0000000111
Question 6 1000000000
Question 7 0000000000
Question 8 0001111111
Question 9 1100000000
F-score 5435555555
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