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Plum Creek Timber Co Inc (NYSE:PCL)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Plum Creek Timber Co Inc has an F-score of 3 indicating the company's financial situation is typical for a stable company.

PCL' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 3

3
9

During the past 13 years, the highest Piotroski F-Score of Plum Creek Timber Co Inc was 9. The lowest was 3. And the median was 6.


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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 30 + 40 + 72 + 46 = $188 Mil.
Cash Flow from Operations was 57 + 84 + 180 + 139 = $460 Mil.
Revenue was 317 + 331 + 366 + 303 = $1,317 Mil.
Gross Profit was 85 + 98 + 122 + 90 = $395 Mil.
Total Assets at the begining of this year (Mar13) was $4,372 Mil.
Total Assets was $5,354 Mil.
Long-Term Debt was $3,197 Mil.
Total Current Assets was $302 Mil.
Total Current Liabilities was $291 Mil.
Net Income was 56 + 79 + 59 + 36 = $230 Mil.

Revenue was 340 + 354 + 354 + 294 = $1,342 Mil.
Gross Profit was 110 + 127 + 110 + 81 = $428 Mil.
Total Assets at the begining of last year (Mar12) was $4,314 Mil.
Total Assets was $4,372 Mil.
Long-Term Debt was $2,598 Mil.
Total Current Assets was $505 Mil.
Total Current Liabilities was $444 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.

Plum Creek Timber Co Inc's current net income was 188. ==> 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.

Plum Creek Timber Co Inc's current cash flow from operations was 460. ==> 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 (Mar13)
=188/4372
=0.04300091

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=230/4314
=0.05331479

Plum Creek Timber Co Inc's return on assets of this year was 0.04300091. Plum Creek Timber Co Inc's return on assets of last year was 0.05331479. ==> 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.

Plum Creek Timber Co Inc's current net income was 188. Plum Creek Timber Co Inc's current cash flow from operations was 460. ==> 460 > 188 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=3197/5354
=0.59712365

Gearing (Last Year)=Long-Term Debt/Total Assets
=2598/4372
=0.59423605

Plum Creek Timber Co Inc's gearing of this year was 0.59712365. Plum Creek Timber Co Inc's gearing of last year was 0.59423605. ==> Last year is lower ==> 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
=302/291
=1.03780069

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=505/444
=1.13738739

Plum Creek Timber Co Inc's current ratio of this year was 1.03780069. Plum Creek Timber Co Inc's current ratio of last year was 1.13738739. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Plum Creek Timber Co Inc's number of shares in issue this year was 177.3. Plum Creek Timber Co Inc's number of shares in issue last year was 162.8. ==> There is more 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
=395/1317
=0.29992407

Gross Margin (Last Year)=Gross Profit/Revenue
=428/1342
=0.31892697

Plum Creek Timber Co Inc's gross margin of this year was 0.29992407. Plum Creek Timber Co Inc's gross margin of last year was 0.31892697. ==> 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 (Mar13)
=1317/4372
=0.30123513

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=1342/4314
=0.3110802

Plum Creek Timber Co Inc's asset turnover of this year was 0.30123513. Plum Creek Timber Co Inc's asset turnover of last year was 0.3110802. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+0+0+0+0
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

Plum Creek Timber Co Inc has an F-score of 3 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.

Plum Creek Timber Co Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1000000011
Q4 1111111111
Q5 1100010101
Q6 1010101011
Q7 1011111110
Q8 1000011101
Q9 1101000110
F-score 9555566777

Plum Creek Timber Co Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 0110111110
Q4 1111111111
Q5 1100000010
Q6 0011111110
Q7 1111000000
Q8 1000011110
Q9 1111111100
F-score 7776677773
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