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SandRidge Energy Inc (NYSE:SD)
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

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

SD' s 10-Year Piotroski F-Score Range
Min: 3   Max: 7
Current: 6

3
7

During the past 12 years, the highest Piotroski F-Score of SandRidge Energy Inc was 7. 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 (Dec14) TTM:Last Year (Dec13) TTM:
Net Income was -136.336 + -32.894 + 157.338 + 265.177 = $253 Mil.
Cash Flow from Operations was 90.451 + 140.341 + 164.892 + 225.43 = $621 Mil.
Revenue was 443.056 + 374.714 + 394.107 + 346.881 = $1,559 Mil.
Gross Profit was 299.912 + 276.198 + 275.666 + 223.103 = $1,075 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(7684.795 + 6878.257 + 6912.819 + 6978.389 + 7259.225) / 5 = $7142.697 Mil.
Total Assets at the begining of this year (Dec13) was $7,685 Mil.
Long-Term Debt was $3,195 Mil.
Total Current Assets was $832 Mil.
Total Current Liabilities was $784 Mil.
Net Income was -487.296 + -28.508 + -81.447 + 43.362 = $-554 Mil.

Revenue was 511.69 + 512.987 + 493.603 + 465.108 = $1,983 Mil.
Gross Profit was 333.674 + 328.012 + 333.219 + 305.653 = $1,301 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(9790.731 + 7678.311 + 7753.636 + 7669.444 + 7684.795) / 5 = $8115.3834 Mil.
Total Assets at the begining of last year (Dec12) was $9,791 Mil.
Long-Term Debt was $3,195 Mil.
Total Current Assets was $1,242 Mil.
Total Current Liabilities was $934 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.

SandRidge Energy Inc's current net income (TTM) was 253. ==> 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.

SandRidge Energy Inc's current cash flow from operations (TTM) was 621. ==> 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 (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Dec13)
=253.285/7684.795
=0.03295924

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=-553.889/9790.731
=-0.05657279

SandRidge Energy Inc's return on assets of this year was 0.03295924. SandRidge Energy Inc's return on assets of last year was -0.05657279. ==> 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.

SandRidge Energy Inc's current net income (TTM) was 253. SandRidge Energy Inc's current cash flow from operations (TTM) was 621. ==> 621 > 253 ==> 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: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=3195.436/7142.697
=0.44737107

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=3194.907/8115.3834
=0.39368528

SandRidge Energy Inc's gearing of this year was 0.44737107. SandRidge Energy Inc's gearing of last year was 0.39368528. ==> Last year is lower than this year ==> Score 0.

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: Dec14)=Total Current Assets/Total Current Liabilities
=831.918/784.451
=1.06050983

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=1241.823/933.818
=1.32983408

SandRidge Energy Inc's current ratio of this year was 1.06050983. SandRidge Energy Inc's current ratio of last year was 1.32983408. ==> 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.

SandRidge Energy Inc's number of shares in issue this year was 543.4. SandRidge Energy Inc's number of shares in issue last year was 484. ==> 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
=1074.879/1558.758
=0.68957401

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1300.558/1983.388
=0.65572546

SandRidge Energy Inc's gross margin of this year was 0.68957401. SandRidge Energy Inc's gross margin of last year was 0.65572546. ==> 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 (Dec13)
=1558.758/7684.795
=0.20283664

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=1983.388/9790.731
=0.20257813

SandRidge Energy Inc's asset turnover of this year was 0.20283664. SandRidge Energy Inc's asset turnover of last year was 0.20257813. ==> This year's asset turnover is higher. ==> Score 1.

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+0+0+0+1+1
=6

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

SandRidge Energy Inc 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.

SandRidge Energy Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 10011101
Question 2 11111111
Question 3 00010101
Question 4 11111111
Question 5 10011010
Question 6 00101110
Question 7 00000000
Question 8 01011101
Question 9 01010101
F-score 44376746

SandRidge Energy Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Question 1 1100000011
Question 2 1111111111
Question 3 0100000111
Question 4 1111111111
Question 5 0011110000
Question 6 1111111000
Question 7 1001000000
Question 8 1110000111
Question 9 1110000111
F-score 7765443566
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