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Primus Guaranty Ltd (OTCPK:PRSG)
Piotroski F-Score
0 (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

Primus Guaranty Ltd has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

PRSG' s 10-Year Piotroski F-Score Range
Min: 0   Max: 0
Current: 0


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 (Dec11) TTM:Last Year (Dec10) TTM:
Net Income was 85.659 + 61.839 + -282.423 + 101.16 = $-33.8 Mil.
Cash Flow from Operations was -7.677 + 7.617 + 15.559 + 12.182 = $27.7 Mil.
Revenue was 90.199 + 62.353 + -280.199 + 103.167 = $-24.5 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0.0 Mil.
Average Total Assets from the begining of this year (Dec10)
to the end of this year (Dec11) was
(634.859 + 618.196 + 611.356 + 594.628 + 585.824) / 5 = $608.9726 Mil.
Total Assets at the begining of this year (Dec10) was $634.9 Mil.
Long-Term Debt was $172.3 Mil.
Total Current Assets was $0.0 Mil.
Total Current Liabilities was $0.0 Mil.
Net Income was 176.923 + -187.67 + 229.759 + 129.037 = $348.0 Mil.

Revenue was 93.3 + -185.279 + 232.726 + 146.375 = $287.1 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0.0 Mil.
Average Total Assets from the begining of last year (Dec09)
to the end of last year (Dec10) was
(732.747 + 3313.408 + 3262.635 + 3293.857 + 634.859) / 5 = $2247.5012 Mil.
Total Assets at the begining of last year (Dec09) was $732.7 Mil.
Long-Term Debt was $215.8 Mil.
Total Current Assets was $0.0 Mil.
Total Current Liabilities was $0.0 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.

Primus Guaranty Ltd's current net income (TTM) was -33.8. ==> Negative ==> Score 0.

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.

Primus Guaranty Ltd's current cash flow from operations (TTM) was 27.7. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Dec10)
=-33.765/634.859
=-0.05318504

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec09)
=348.049/732.747
=0.47499205

Primus Guaranty Ltd's return on assets of this year was -0.05318504. Primus Guaranty Ltd's return on assets of last year was 0.47499205. ==> 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.

Primus Guaranty Ltd's current net income (TTM) was -33.8. Primus Guaranty Ltd's current cash flow from operations (TTM) was 27.7. ==> 27.7 > -33.8 ==> 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: Dec11)=Long-Term Debt/Average Total Assets from Dec10 to Dec11
=172.334/608.9726
=0.28299139

Gearing (Last Year: Dec10)=Long-Term Debt/Average Total Assets from Dec09 to Dec10
=215.828/2247.5012
=0.0960302

Primus Guaranty Ltd's gearing of this year was 0.28299139. Primus Guaranty Ltd's gearing of last year was 0.0960302. ==> 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: Dec11)=Total Current Assets/Total Current Liabilities
=0/0
=

Current Ratio (Last Year: Dec10)=Total Current Assets/Total Current Liabilities
=0/0
=

Primus Guaranty Ltd's current ratio of this year was . Primus Guaranty Ltd's current ratio of last year was . ==> 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.

Primus Guaranty Ltd's number of shares in issue this year was 35.2. Primus Guaranty Ltd's number of shares in issue last year was 39.3. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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: TTM)=Gross Profit/Revenue
=0/-24.48
=0

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=0/287.122
=0

Primus Guaranty Ltd's gross margin of this year was 0. Primus Guaranty Ltd's gross margin of last year was 0. ==> Last year's gross margin is higher ==> Score 0.

Q9. 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 (Dec10)
=-24.48/634.859
=-0.03855974

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec09)
=287.122/732.747
=0.3918433

Primus Guaranty Ltd's asset turnover of this year was -0.03855974. Primus Guaranty Ltd's asset turnover of last year was 0.3918433. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

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

Primus Guaranty Ltd has an F-score of 3. It is a bad or low score, which usually implies poor business operation.


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.

Primus Guaranty Ltd Annual Data

Dec02Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11
Q1 1100110
Q2 1110001
Q3 0100100
Q4 1011001
Q5 0010111
Q6 0000000
Q7 0101111
Q8 0000000
Q9 0100100
F-score 3532534

Primus Guaranty Ltd Quarterly Data

Sep09Dec09Mar10Jun10Sep10Dec10Mar11Jun11Sep11Dec11
Q1 1111111100
Q2 0000001111
Q3 1111100000
Q4 0000000011
Q5 1111111100
Q6 0000000000
Q7 1111111111
Q8 0000000000
Q9 1111100000
F-score 4444323323
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