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NorthWestern Corp (NYSE:NWE)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

NorthWestern Corp has an F-score of 4 indicating the company's financial situation is typical for a stable company.

NWE' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 4

3
8

During the past 13 years, the highest Piotroski F-Score of NorthWestern Corp was 8. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 7.746 + 45.58 + 26.093 + 15.647 = $95 Mil.
Cash Flow from Operations was 12.327 + 112.235 + 22.378 + 41.527 = $188 Mil.
Revenue was 270.281 + 369.723 + 319.09 + 262.248 = $1,221 Mil.
Gross Profit was 157.807 + 202.295 + 182.951 + 157.95 = $701 Mil.
Total Assets at the begining of this year (Jun13) was $3,551 Mil.
Total Assets was $3,792 Mil.
Long-Term Debt was $1,211 Mil.
Total Current Assets was $291 Mil.
Total Current Liabilities was $431 Mil.
Net Income was 14.341 + 37.902 + 58.697 + -3.772 = $107 Mil.

Revenue was 260.161 + 313.02 + 280.773 + 235.866 = $1,090 Mil.
Gross Profit was 153.248 + 180.824 + 213.223 + 142.805 = $690 Mil.
Total Assets at the begining of last year (Jun12) was $3,224 Mil.
Total Assets was $3,551 Mil.
Long-Term Debt was $1,086 Mil.
Total Current Assets was $246 Mil.
Total Current Liabilities was $352 Mil.

Profitability

Q1. 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 was 95. ==> Positive ==> Score 1.

Q2. 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 was 188. ==> 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/Total Assets at the beginning of this year (Jun13)
=95.066/3551.048
=0.02677125

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=107.168/3224.089
=0.03323978

NorthWestern Corp's return on assets of this year was 0.02677125. NorthWestern Corp's return on assets of last year was 0.03323978. ==> 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.

NorthWestern Corp's current net income was 95. NorthWestern Corp's current cash flow from operations was 188. ==> 188 > 95 ==> CFROA > ROA ==> Score 1.

Funding

Q5. 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)=Long-Term Debt/Total Assets
=1211.141/3791.777
=0.31941251

Gearing (Last Year)=Long-Term Debt/Total Assets
=1085.824/3551.048
=0.30577565

NorthWestern Corp's gearing of this year was 0.31941251. NorthWestern Corp's gearing of last year was 0.30577565. ==> Last year is lower than this year ==> Score 0.

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)=Total Current Assets/Total Current Liabilities
=290.657/430.907
=0.67452374

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=246.081/352.483
=0.6981358

NorthWestern Corp's current ratio of this year was 0.67452374. NorthWestern Corp's current ratio of last year was 0.6981358. ==> 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.

NorthWestern Corp's number of shares in issue this year was 39.1. NorthWestern Corp's number of shares in issue last year was 38.1. ==> There is larger number of shares in issue this year. ==> Score 0.

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)=Gross Profit/Revenue
=701.003/1221.342
=0.57396127

Gross Margin (Last Year)=Gross Profit/Revenue
=690.1/1089.82
=0.63322384

NorthWestern Corp's gross margin of this year was 0.57396127. NorthWestern Corp's gross margin of last year was 0.63322384. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Jun13)
=1221.342/3551.048
=0.34393847

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=1089.82/3224.089
=0.33802417

NorthWestern Corp's asset turnover of this year was 0.34393847. NorthWestern Corp's asset turnover of last year was 0.33802417. ==> 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+0+0+0+0+1
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

NorthWestern Corp has an F-score of 4 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 0111111111
Q2 0111111111
Q3 1101111110
Q4 0111111111
Q5 0100101100
Q6 1010011011
Q7 1110010000
Q8 0000001110
Q9 0101000000
F-score 3755567664

NorthWestern Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1101111000
Q4 1111111111
Q5 1100001000
Q6 0011110110
Q7 1000000000
Q8 1111111000
Q9 0000000011
F-score 7656666454
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