Switch to:
Scotts Miracle Gro Co (NYSE:SMG)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

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

Scotts Miracle Gro Co has an F-score of 7 indicating the company's financial situation is typical for a stable company.

SMG' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 7

3
8

During the past 13 years, the highest Piotroski F-Score of Scotts Miracle Gro Co was 8. The lowest was 3. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was -65.6 + -19.4 + 148.2 + 100 = $163 Mil.
Cash Flow from Operations was -180.2 + 198.9 + 688.4 + -376.7 = $330 Mil.
Revenue was 196.4 + 443 + 1148.1 + 1019.6 = $2,807 Mil.
Gross Profit was 34.9 + 130.8 + 441.8 + 378.7 = $986 Mil.
Total Assets at the begining of this year (Dec12) was $2,128 Mil.
Total Assets was $2,159 Mil.
Long-Term Debt was $652 Mil.
Total Current Assets was $1,016 Mil.
Total Current Liabilities was $649 Mil.
Net Income was -67.7 + -40.1 + 93.3 + 127.2 = $113 Mil.

Revenue was 205.8 + 401.2 + 1054.9 + 1170.4 = $2,832 Mil.
Gross Profit was 31.1 + 105 + 369 + 461.7 = $967 Mil.
Total Assets at the begining of last year (Dec11) was $2,164 Mil.
Total Assets was $2,128 Mil.
Long-Term Debt was $982 Mil.
Total Current Assets was $1,057 Mil.
Total Current Liabilities was $376 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.

Scotts Miracle Gro Co's current net income was 163. ==> 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.

Scotts Miracle Gro Co's current cash flow from operations was 330. ==> 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)
=163.2/2128.1
=0.07668813

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=112.7/2164.3
=0.05207226

Scotts Miracle Gro Co's return on assets of this year was 0.07668813. Scotts Miracle Gro Co's return on assets of last year was 0.05207226. ==> 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.

Scotts Miracle Gro Co's current net income was 163. Scotts Miracle Gro Co's current cash flow from operations was 330. ==> 330 > 163 ==> 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
=652.3/2159.4
=0.30207465

Gearing (Last Year)=Long-Term Debt/Total Assets
=981.9/2128.1
=0.46139749

Scotts Miracle Gro Co's gearing of this year was 0.30207465. Scotts Miracle Gro Co's gearing of last year was 0.46139749. ==> 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
=1015.7/648.9
=1.56526429

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1056.9/376.4
=2.80791711

Scotts Miracle Gro Co's current ratio of this year was 1.56526429. Scotts Miracle Gro Co's current ratio of last year was 2.80791711. ==> 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.

Scotts Miracle Gro Co's number of shares in issue this year was 62.1. Scotts Miracle Gro Co's number of shares in issue last year was 61.4. ==> 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
=986.2/2807.1
=0.35132343

Gross Margin (Last Year)=Gross Profit/Revenue
=966.8/2832.3
=0.34134802

Scotts Miracle Gro Co's gross margin of this year was 0.35132343. Scotts Miracle Gro Co's gross margin of last year was 0.34134802. ==> 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 (Dec12)
=2807.1/2128.1
=1.31906395

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=2832.3/2164.3
=1.30864483

Scotts Miracle Gro Co's asset turnover of this year was 1.31906395. Scotts Miracle Gro Co's asset turnover of last year was 1.30864483. ==> 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+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Scotts Miracle Gro Co has an F-score of 7 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.

Scotts Miracle Gro Co Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Q1 1111011111
Q2 1111111111
Q3 0010011001
Q4 1111111011
Q5 1100111011
Q6 1010001110
Q7 0001100110
Q8 1000011001
Q9 1110110010
F-score 7564577476

Scotts Miracle Gro Co Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 0000000111
Q4 0001111111
Q5 0001111111
Q6 1110111000
Q7 1111100000
Q8 0000000111
Q9 0000110101
F-score 4445765767
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