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Sunoco LP (NYSE:SUN)
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

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

SUN' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 7
Current: 6

4
7

During the past 6 years, the highest Piotroski F-Score of Sunoco LP was 7. The lowest was 4. 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 157.035 + 39.542 + 7.755 + 62.009 = $266 Mil.
Cash Flow from Operations was 99.774 + 210.769 + 49.811 + 162.343 = $523 Mil.
Revenue was 4205.985 + 4487.317 + 3674.624 + 3202.313 = $15,570 Mil.
Gross Profit was 236.773 + 381.147 + 333.216 + 498.743 = $1,450 Mil.
Average Total Assets from the begining of this year (Mar15)
to the end of this year (Mar16) was
(2210.405 + 3578.343 + 6179.593 + 6247.583 + 8802.642) / 5 = $5403.7132 Mil.
Total Assets at the begining of this year (Mar15) was $2,210 Mil.
Long-Term Debt was $4,193 Mil.
Total Current Assets was $1,197 Mil.
Total Current Liabilities was $671 Mil.
Net Income was 10.132 + 9.595 + 0 + 49.306 = $69 Mil.

Revenue was 1216.587 + 1376.025 + 0 + 4342.388 = $6,935 Mil.
Gross Profit was 22.12 + 22.203 + 0 + 441.092 = $485 Mil.
Average Total Assets from the begining of last year (Dec13)
to the end of last year (Mar15) was
(390.084 + 454.163 + 459.353 + 1299.813 + 2210.405) / 5 = $962.7636 Mil.
Total Assets at the begining of last year (Dec13) was $390 Mil.
Long-Term Debt was $856 Mil.
Total Current Assets was $212 Mil.
Total Current Liabilities was $169 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.

Sunoco LP's current net income (TTM) was 266. ==> 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.

Sunoco LP's current cash flow from operations (TTM) was 523. ==> 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 (Mar15)
=266.341/2210.405
=0.12049421

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec13)
=69.033/390.084
=0.17696958

Sunoco LP's return on assets of this year was 0.12049421. Sunoco LP's return on assets of last year was 0.17696958. ==> Last year is higher ==> Score 0.

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.

Sunoco LP's current net income (TTM) was 266. Sunoco LP's current cash flow from operations (TTM) was 523. ==> 523 > 266 ==> 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
=4192.912/5403.7132
=0.77593163

Gearing (Last Year: Mar15)=Long-Term Debt/Average Total Assets from Dec13 to Mar15
=856.187/962.7636
=0.88930138

Sunoco LP's gearing of this year was 0.77593163. Sunoco LP's gearing of last year was 0.88930138. ==> 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
=1197.255/671.248
=1.78362543

Current Ratio (Last Year: Mar15)=Total Current Assets/Total Current Liabilities
=211.92/168.801
=1.2554428

Sunoco LP's current ratio of this year was 1.78362543. Sunoco LP's current ratio of last year was 1.2554428. ==> This year's current ratio is higher. ==> Score 1.

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.

Sunoco LP's number of shares in issue this year was 87.5. Sunoco LP's number of shares in issue last year was 35.1. ==> 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
=1449.879/15570.239
=0.09311861

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=485.415/6935
=0.06999495

Sunoco LP's gross margin of this year was 0.09311861. Sunoco LP's gross margin of last year was 0.06999495. ==> 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)
=15570.239/2210.405
=7.04406613

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec13)
=6935/390.084
=17.77822213

Sunoco LP's asset turnover of this year was 7.04406613. Sunoco LP's asset turnover of last year was 17.77822213. ==> 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+0+1+1+1+0+1+0
=6

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

Sunoco LP 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.

Sunoco LP Annual Data

Dec13Dec15
Question 1 11
Question 2 11
Question 3 11
Question 4 11
Question 5 10
Question 6 01
Question 7 00
Question 8 11
Question 9 01
F-score 67

Sunoco LP Quarterly Data

Sep13Dec13Mar14Jun14Sep14Mar15Jun15Sep15Dec15Mar16
Question 1 111111111
Question 2 101111111
Question 3 110011110
Question 4 100000111
Question 5 110100001
Question 6 011111111
Question 7 000100000
Question 8 111111111
Question 9 000011110
F-score 654666776
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