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Plum Creek Timber Co Inc (NYSE:PCL)
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

Plum Creek Timber Co Inc has an F-score of 5 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: 5

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 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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was 61 + 68 + 42 + 21 = $192 Mil.
Cash Flow from Operations was 133 + 135 + 151 + 76 = $495 Mil.
Revenue was 375 + 428 + 406 + 302 = $1,511 Mil.
Gross Profit was 109 + 119 + 91 + 75 = $394 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(5337 + 5277 + 5187 + 5086 + 5080) / 5 = $5193.4 Mil.
Total Assets at the begining of this year (Jun14) was $5,337 Mil.
Long-Term Debt was $2,759 Mil.
Total Current Assets was $263 Mil.
Total Current Liabilities was $686 Mil.
Net Income was 72 + 40 + 30 + 55 = $197 Mil.

Revenue was 366 + 331 + 317 + 356 = $1,370 Mil.
Gross Profit was 122 + 98 + 85 + 109 = $414 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(4465 + 4631 + 5695 + 5354 + 5337) / 5 = $5096.4 Mil.
Total Assets at the begining of last year (Jun13) was $4,465 Mil.
Long-Term Debt was $3,197 Mil.
Total Current Assets was $283 Mil.
Total Current Liabilities was $292 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.

Plum Creek Timber Co Inc's current net income (TTM) was 192. ==> 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.

Plum Creek Timber Co Inc's current cash flow from operations (TTM) was 495. ==> 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.

Plum Creek Timber Co Inc's return on assets of this year was 0.03597527. Plum Creek Timber Co Inc's return on assets of last year was 0.04412094. ==> 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.

Plum Creek Timber Co Inc's current net income (TTM) was 192. Plum Creek Timber Co Inc's current cash flow from operations (TTM) was 495. ==> 495 > 192 ==> 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: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=2759/5193.4
=0.5312512

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=3197/5096.4
=0.62730555

Plum Creek Timber Co Inc's gearing of this year was 0.5312512. Plum Creek Timber Co Inc's gearing of last year was 0.62730555. ==> 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: Jun15)=Total Current Assets/Total Current Liabilities
=263/686
=0.38338192

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=283/292
=0.96917808

Plum Creek Timber Co Inc's current ratio of this year was 0.38338192. Plum Creek Timber Co Inc's current ratio of last year was 0.96917808. ==> 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.

Plum Creek Timber Co Inc's number of shares in issue this year was 175.6. Plum Creek Timber Co Inc's number of shares in issue last year was 177.4. ==> 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
=394/1511
=0.26075447

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=414/1370
=0.30218978

Plum Creek Timber Co Inc's gross margin of this year was 0.26075447. Plum Creek Timber Co Inc's gross margin of last year was 0.30218978. ==> Last year's gross margin is higher ==> Score 0.

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 (Jun14)
=1511/5337
=0.28311786

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=1370/4465
=0.30683091

Plum Creek Timber Co Inc's asset turnover of this year was 0.28311786. Plum Creek Timber Co Inc's asset turnover of last year was 0.30683091. ==> 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+1+0+0
=5

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

Plum Creek Timber Co Inc 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.

Plum Creek Timber Co Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 0000000110
Question 4 1111111111
Question 5 0000101001
Question 6 0101010110
Question 7 1111111000
Question 8 0000111010
Question 9 1010001100
F-score 5555667664

Plum Creek Timber Co Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1111111111
Question 2 1111111111
Question 3 1111000000
Question 4 1111111111
Question 5 0000000111
Question 6 1111001000
Question 7 0000000011
Question 8 1111000000
Question 9 1110000000
F-score 7776334455
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