Switch to:
RR Donnelley & Sons Co (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

RR Donnelley & Sons Co 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 RR Donnelley & Sons Co 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was -29 + 104 + 14.7 + 65.4 = $155 Mil.
Cash Flow from Operations was -80.4 + 387.7 + 249.2 + 153.7 = $710 Mil.
Revenue was 2673.8 + 2755.3 + 2614.9 + 2571.6 = $10,616 Mil.
Gross Profit was 573.2 + 603.6 + 570.4 + 598.2 = $2,345 Mil.
Total Assets at the begining of this year (Mar13) was $7,007 Mil.
Total Assets was $7,594 Mil.
Long-Term Debt was $3,627 Mil.
Total Current Assets was $3,178 Mil.
Total Current Liabilities was $2,198 Mil.
Net Income was 27.1 + -849 + 71.4 + 88.8 = $-662 Mil.

Revenue was 2538.5 + 2659.6 + 2508.8 + 2528.6 = $10,236 Mil.
Gross Profit was 558.3 + 585.3 + 573 + 594.7 = $2,311 Mil.
Total Assets at the begining of last year (Mar12) was $8,213 Mil.
Total Assets was $7,007 Mil.
Long-Term Debt was $3,512 Mil.
Total Current Assets was $2,814 Mil.
Total Current Liabilities was $1,751 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.

RR Donnelley & Sons Co's current net income was 155. ==> 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.

RR Donnelley & Sons Co's current cash flow from operations was 710. ==> 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 (Mar13)
=155.1/7006.8
=0.02213564

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=-661.7/8212.8
=-0.08056936

RR Donnelley & Sons Co's return on assets of this year was 0.02213564. RR Donnelley & Sons Co's return on assets of last year was -0.08056936. ==> 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.

RR Donnelley & Sons Co's current net income was 155. RR Donnelley & Sons Co's current cash flow from operations was 710. ==> 710 > 155 ==> 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
=3627.2/7594.4
=0.47761508

Gearing (Last Year)=Long-Term Debt/Total Assets
=3512.2/7006.8
=0.50125592

RR Donnelley & Sons Co's gearing of this year was 0.47761508. RR Donnelley & Sons Co's gearing of last year was 0.50125592. ==> This year is lower. ==> Score 1.

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
=3178.3/2198.3
=1.44579903

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2814.4/1750.9
=1.60740191

RR Donnelley & Sons Co's current ratio of this year was 1.44579903. RR Donnelley & Sons Co's current ratio of last year was 1.60740191. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

RR Donnelley & Sons Co's number of shares in issue this year was 193.1. RR Donnelley & Sons Co's number of shares in issue last year was 182.9. ==> 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
=2345.4/10615.6
=0.220939

Gross Margin (Last Year)=Gross Profit/Revenue
=2311.3/10235.5
=0.22581212

RR Donnelley & Sons Co's gross margin of this year was 0.220939. RR Donnelley & Sons Co's gross margin of last year was 0.22581212. ==> 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 (Mar13)
=10615.6/7006.8
=1.51504253

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=10235.5/8212.8
=1.24628628

RR Donnelley & Sons Co's asset turnover of this year was 1.51504253. RR Donnelley & Sons Co's asset turnover of last year was 1.24628628. ==> 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+1+0+0+0+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

RR Donnelley & Sons Co 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.

RR Donnelley & Sons Co Annual Data

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

RR Donnelley & Sons Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 0000000011
Q2 1111111111
Q3 0000000011
Q4 1111111111
Q5 0000000001
Q6 0011111110
Q7 1111100000
Q8 1000000000
Q9 1000111111
F-score 5344544466
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
Email Hide