Switch to:
Resolute Forest Products Inc (NYSE:RFP)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

Resolute Forest Products Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

RFP' s 10-Year Piotroski F-Score Range
Min: 2   Max: 7
Current: 5

2
7

During the past 13 years, the highest Piotroski F-Score of Resolute Forest Products Inc was 7. The lowest was 2. 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 -2 + -50 + -3 + -588 = $-643 Mil.
Cash Flow from Operations was 63 + -41 + 96 + 62 = $180 Mil.
Revenue was 1091 + 1016 + 1150 + 1130 = $4,387 Mil.
Gross Profit was 279 + 195 + 276 + 273 = $1,023 Mil.
Total Assets at the begining of this year (Jun13) was $6,148 Mil.
Total Assets was $5,247 Mil.
Long-Term Debt was $597 Mil.
Total Current Assets was $1,546 Mil.
Total Current Liabilities was $589 Mil.
Net Income was -43 + -5 + -36 + 31 = $-53 Mil.

Revenue was 1107 + 1074 + 1128 + 1153 = $4,462 Mil.
Gross Profit was 248 + 218 + 252 + 258 = $976 Mil.
Total Assets at the begining of last year (Jun12) was $6,473 Mil.
Total Assets was $6,148 Mil.
Long-Term Debt was $602 Mil.
Total Current Assets was $1,604 Mil.
Total Current Liabilities was $552 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.

Resolute Forest Products Inc's current net income was -643. ==> 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.

Resolute Forest Products Inc's current cash flow from operations was 180. ==> 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)
=-643/6148
=-0.10458686

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=-53/6473
=-0.00818786

Resolute Forest Products Inc's return on assets of this year was -0.10458686. Resolute Forest Products Inc's return on assets of last year was -0.00818786. ==> 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.

Resolute Forest Products Inc's current net income was -643. Resolute Forest Products Inc's current cash flow from operations was 180. ==> 180 > -643 ==> 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
=597/5247
=0.1137793

Gearing (Last Year)=Long-Term Debt/Total Assets
=602/6148
=0.09791802

Resolute Forest Products Inc's gearing of this year was 0.1137793. Resolute Forest Products Inc's gearing of last year was 0.09791802. ==> 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
=1546/589
=2.62478778

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1604/552
=2.9057971

Resolute Forest Products Inc's current ratio of this year was 2.62478778. Resolute Forest Products Inc's current ratio of last year was 2.9057971. ==> 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.

Resolute Forest Products Inc's number of shares in issue this year was 94.6. Resolute Forest Products Inc's number of shares in issue last year was 94.8. ==> 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)=Gross Profit/Revenue
=1023/4387
=0.23318897

Gross Margin (Last Year)=Gross Profit/Revenue
=976/4462
=0.21873599

Resolute Forest Products Inc's gross margin of this year was 0.23318897. Resolute Forest Products Inc's gross margin of last year was 0.21873599. ==> This year's gross margin is higher. ==> Score 1.

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)
=4387/6148
=0.71356539

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=4462/6473
=0.68932489

Resolute Forest Products Inc's asset turnover of this year was 0.71356539. Resolute Forest Products Inc's asset turnover of last year was 0.68932489. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+1+0+1+0+0+1+1+1
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Resolute Forest Products 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.

Resolute Forest Products Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 0000001100
Q2 1110011111
Q3 0000011000
Q4 1111110111
Q5 1001010110
Q6 0110111100
Q7 1010000001
Q8 1000100101
Q9 0011001010
F-score 5353355644

Resolute Forest Products Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1010000000
Q2 1111111111
Q3 0000000000
Q4 1111111111
Q5 1111100000
Q6 1000011000
Q7 1001111111
Q8 1100000111
Q9 0001100001
F-score 7445544445
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK