Switch to:
R.R. Donnelley & Sons Company (NAS:RRD)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

R.R. Donnelley & Sons Company has an F-score of 6 indicating the company's financial situation is typical for a stable company.

RRD' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 6

2
8

During the past 13 years, the highest Piotroski F-Score of R.R. Donnelley & Sons Company was 8. The lowest was 2. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 104 + 14.7 + 65.4 + 27.1 = $211 Mil.
Cash Flow from Operations was 387.7 + 249.2 + 153.7 + -95.8 = $695 Mil.
Revenue was 2755.3 + 2614.9 + 2571.6 + 2538.5 = $10,480 Mil.
Gross Profit was 603.6 + 570.4 + 598.2 + 558.3 = $2,331 Mil.
Total Assets at the begining of this year (Dec12) was $7,263 Mil.
Total Assets was $7,238 Mil.
Long-Term Debt was $3,587 Mil.
Total Current Assets was $3,562 Mil.
Total Current Liabilities was $2,229 Mil.
Net Income was -849 + 71.4 + 88.8 + 37.4 = $-651 Mil.

Revenue was 2659.6 + 2508.8 + 2528.6 + 2524.9 = $10,222 Mil.
Gross Profit was 585.3 + 573 + 594.7 + 579.9 = $2,333 Mil.
Total Assets at the begining of last year (Dec11) was $8,282 Mil.
Total Assets was $7,263 Mil.
Long-Term Debt was $3,420 Mil.
Total Current Assets was $2,977 Mil.
Total Current Liabilities was $2,054 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.

R.R. Donnelley & Sons Company's current net income was 211. ==> 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.

R.R. Donnelley & Sons Company's current cash flow from operations was 695. ==> 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 (Dec12)
=211.2/7262.7
=0.02908009

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=-651.4/8281.7
=-0.07865535

R.R. Donnelley & Sons Company's return on assets of this year was 0.02908009. R.R. Donnelley & Sons Company's return on assets of last year was -0.07865535. ==> This year is higher. ==> Score 1.

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.

R.R. Donnelley & Sons Company's current net income was 211. R.R. Donnelley & Sons Company's current cash flow from operations was 695. ==> 695 > 211 ==> 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
=3587/7238.2
=0.4955652

Gearing (Last Year)=Long-Term Debt/Total Assets
=3420.2/7262.7
=0.47092679

R.R. Donnelley & Sons Company's gearing of this year was 0.4955652. R.R. Donnelley & Sons Company's gearing of last year was 0.47092679. ==> 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
=3561.6/2228.7
=1.59806165

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2977.4/2053.9
=1.44963241

R.R. Donnelley & Sons Company's current ratio of this year was 1.59806165. R.R. Donnelley & Sons Company's current ratio of last year was 1.44963241. ==> This year's current ratio is higher. ==> Score 1.

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.

R.R. Donnelley & Sons Company's number of shares in issue this year was 184.1. R.R. Donnelley & Sons Company's number of shares in issue last year was 180.7. ==> 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
=2330.5/10480.3
=0.22236959

Gross Margin (Last Year)=Gross Profit/Revenue
=2332.9/10221.9
=0.22822567

R.R. Donnelley & Sons Company's gross margin of this year was 0.22236959. R.R. Donnelley & Sons Company's gross margin of last year was 0.22822567. ==> 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 (Dec12)
=10480.3/7262.7
=1.44303083

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=10221.9/8281.7
=1.23427557

R.R. Donnelley & Sons Company's asset turnover of this year was 1.44303083. R.R. Donnelley & Sons Company's asset turnover of last year was 1.23427557. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+1+0+0+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

R.R. Donnelley & Sons Company 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.

R.R. Donnelley & Sons Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1110001001
Q2 1111111111
Q3 0010011001
Q4 1111111111
Q5 1010000000
Q6 1010111011
Q7 0001110110
Q8 1100000100
Q9 1011011111
F-score 7474466556

R.R. Donnelley & Sons Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1000000001
Q2 1111111111
Q3 1000000001
Q4 1111111111
Q5 1000000000
Q6 0001111111
Q7 1111110000
Q8 1100000000
Q9 1100011111
F-score 8534454446
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
Hide