Switch to:
Transocean Ltd (NYSE:RIG)
Piotroski F-Score
6 (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

Transocean Ltd has an F-score of 6 indicating the company's financial situation is typical for a stable company.

RIG' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 6

3
8

During the past 13 years, the highest Piotroski F-Score of Transocean Ltd was 8. 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 (Mar16) TTM:Last Year (Mar15) TTM:
Net Income was 342 + 321 + 611 + 249 = $1,523 Mil.
Cash Flow from Operations was 1311 + 648 + 960 + 631 = $3,550 Mil.
Revenue was 1884 + 1608 + 1851 + 1341 = $6,684 Mil.
Gross Profit was 1687 + 728 + 1057 + 676 = $4,148 Mil.
Average Total Assets from the begining of this year (Mar15)
to the end of this year (Mar16) was
(27105 + 26973 + 25835 + 26329 + 26245) / 5 = $26497.4 Mil.
Total Assets at the begining of this year (Mar15) was $27,105 Mil.
Long-Term Debt was $7,253 Mil.
Total Current Assets was $4,700 Mil.
Total Current Liabilities was $2,588 Mil.
Net Income was 587 + -2217 + -739 + -483 = $-2,852 Mil.

Revenue was 2328 + 2270 + 2237 + 2043 = $8,878 Mil.
Gross Profit was 1115 + 952 + 927 + 959 = $3,953 Mil.
Average Total Assets from the begining of last year (Mar14)
to the end of last year (Mar15) was
(31897 + 32067 + 29964 + 28571 + 27105) / 5 = $29920.8 Mil.
Total Assets at the begining of last year (Mar14) was $31,897 Mil.
Long-Term Debt was $8,996 Mil.
Total Current Assets was $5,843 Mil.
Total Current Liabilities was $3,173 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.

Transocean Ltd's current net income (TTM) was 1,523. ==> 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.

Transocean Ltd's current cash flow from operations (TTM) was 3,550. ==> 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.

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=-2852/31897
=-0.0894128

Transocean Ltd's return on assets of this year was 0.0561889. Transocean Ltd's return on assets of last year was -0.0894128. ==> This year is higher. ==> Score 1.

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.

Transocean Ltd's current net income (TTM) was 1,523. Transocean Ltd's current cash flow from operations (TTM) was 3,550. ==> 3,550 > 1,523 ==> 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: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=7253/26497.4
=0.27372497

Gearing (Last Year: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=8996/29920.8
=0.30066041

Transocean Ltd's gearing of this year was 0.27372497. Transocean Ltd's gearing of last year was 0.30066041. ==> 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: Mar16)=Total Current Assets/Total Current Liabilities
=4700/2588
=1.81607419

Current Ratio (Last Year: Mar15)=Total Current Assets/Total Current Liabilities
=5843/3173
=1.84147494

Transocean Ltd's current ratio of this year was 1.81607419. Transocean Ltd's current ratio of last year was 1.84147494. ==> 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.

Transocean Ltd's number of shares in issue this year was 364. Transocean Ltd's number of shares in issue last year was 363. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=4148/6684
=0.62058648

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3953/8878
=0.44525794

Transocean Ltd's gross margin of this year was 0.62058648. Transocean Ltd's gross margin of last year was 0.44525794. ==> This year's gross margin is higher. ==> Score 1.

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 (Mar15)
=6684/27105
=0.24659657

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=8878/31897
=0.27833339

Transocean Ltd's asset turnover of this year was 0.24659657. Transocean Ltd's asset turnover of last year was 0.27833339. ==> 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+1+1+1+0+0+1+0
=6

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

Transocean Ltd has an F-score of 6 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.

Transocean Ltd Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111100101
Question 2 1111111111
Question 3 1100001101
Question 4 0011111111
Question 5 0011100111
Question 6 1010101101
Question 7 1101100000
Question 8 1110001111
Question 9 1100011110
F-score 7665636857

Transocean Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Question 1 1110000011
Question 2 1111111111
Question 3 1110000111
Question 4 1111111111
Question 5 1101111111
Question 6 1000001110
Question 7 0000000000
Question 8 1111111111
Question 9 1111100000
F-score 8765545676
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)
FEEDBACK