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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 10-Year Piotroski F-Score Range
Min: 3   Max: 7
Current: 5

3
7

During the past 13 years, the highest Piotroski F-Score of NorthWestern Corp was 7. The lowest was 3. 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 (Dec14) TTM:Last Year (Dec13) TTM:
Net Income was 45.58 + 7.746 + 30.191 + 37.169 = $121 Mil.
Cash Flow from Operations was 112.235 + 12.327 + 80.404 + 45.073 = $250 Mil.
Revenue was 369.723 + 270.281 + 251.912 + 312.947 = $1,205 Mil.
Gross Profit was 202.295 + 157.807 + 157.32 + 204.85 = $722 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(3715.26 + 3751.258 + 3791.777 + 3874.298 + 4973.943) / 5 = $4021.3072 Mil.
Total Assets at the begining of this year (Dec13) was $3,715 Mil.
Long-Term Debt was $1,690 Mil.
Total Current Assets was $351 Mil.
Total Current Liabilities was $615 Mil.
Net Income was 37.902 + 14.341 + 15.647 + 26.093 = $94 Mil.

Revenue was 313.02 + 260.161 + 262.248 + 319.09 = $1,155 Mil.
Gross Profit was 180.824 + 153.248 + 157.95 + 182.951 = $675 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(3485.533 + 3480.73 + 3551.048 + 3633.65 + 3715.26) / 5 = $3573.2442 Mil.
Total Assets at the begining of last year (Dec12) was $3,486 Mil.
Long-Term Debt was $1,185 Mil.
Total Current Assets was $321 Mil.
Total Current Liabilities was $464 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 121. ==> 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 250. ==> 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 (Dec13)
=120.686/3715.26
=0.03248386

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=93.983/3485.533
=0.02696374

NorthWestern Corp's return on assets of this year was 0.03248386. NorthWestern Corp's return on assets of last year was 0.02696374. ==> 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.

NorthWestern Corp's current net income (TTM) was 121. NorthWestern Corp's current cash flow from operations (TTM) was 250. ==> 250 > 121 ==> 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
=1690.261/4021.3072
=0.42032626

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=1184.992/3573.2442
=0.33162917

NorthWestern Corp's gearing of this year was 0.42032626. NorthWestern Corp's gearing of last year was 0.33162917. ==> 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: Dec14)=Total Current Assets/Total Current Liabilities
=350.885/614.582
=0.57093276

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=320.956/463.588
=0.69233026

NorthWestern Corp's current ratio of this year was 0.57093276. NorthWestern Corp's current ratio of last year was 0.69233026. ==> 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 43.5. NorthWestern Corp's number of shares in issue last year was 38.6. ==> 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
=722.272/1204.863
=0.59946401

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=674.973/1154.519
=0.58463568

NorthWestern Corp's gross margin of this year was 0.59946401. NorthWestern Corp's gross margin of last year was 0.58463568. ==> 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)
=1204.863/3715.26
=0.32430113

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=1154.519/3485.533
=0.33123169

NorthWestern Corp's asset turnover of this year was 0.32430113. NorthWestern Corp's asset turnover of last year was 0.33123169. ==> 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+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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1001111111
Question 3 1011111101
Question 4 1001111111
Question 5 1001001000
Question 6 0100110110
Question 7 1100100000
Question 8 0001111101
Question 9 1010000000
F-score 7336766645

NorthWestern Corp Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 0111100001
Question 4 1111111111
Question 5 0000100000
Question 6 1111011000
Question 7 0000000000
Question 8 1111100001
Question 9 0000001100
F-score 5666645435
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