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Titanium Metals Corporation (NYSE:TIE)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

Titanium Metals Corporation has an F-score of 5 indicating the company's financial situation is typical for a stable company.

TIE' s 10-Year Piotroski F-Score Range
Min: 2   Max: 7
Current: 4

2
7

During the past 13 years, the highest Piotroski F-Score of Titanium Metals Corporation was 7. The lowest was 2. 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 (Dec11) TTM:Last Year (Dec10) TTM:
Net Income was $114 Mil.
Cash Flow from Operations was $-42 Mil.
Revenue was $1,045 Mil.
Gross Profit was $224 Mil.
Total Assets at the begining of this year (Dec10) was $1,498 Mil.
Total Assets was $1,622 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $960 Mil.
Total Current Liabilities was $183 Mil.
Net Income was $81 Mil.

Revenue was $857 Mil.
Gross Profit was $179 Mil.
Total Assets at the begining of last year (Dec09) was $1,379 Mil.
Total Assets was $1,498 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $941 Mil.
Total Current Liabilities was $123 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.

Titanium Metals Corporation's current net income was 114. ==> 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.

Titanium Metals Corporation's current cash flow from operations was -42. ==> Negative ==> Score 0.

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 (Dec10)
=114/1498
=0.07610147

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec09)
=80.7/1378.6
=0.05853765

Titanium Metals Corporation's return on assets of this year was 0.07610147. Titanium Metals Corporation's return on assets of last year was 0.05853765. ==> 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.

Titanium Metals Corporation's current net income was 114. Titanium Metals Corporation's current cash flow from operations was -42. ==> -42 =< 114 ==> CFROA =< ROA ==> Score 0.

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
=0/1622
=0

Gearing (Last Year)=Long-Term Debt/Total Assets
=0/1498
=0

Titanium Metals Corporation's gearing of this year was 0. Titanium Metals Corporation's gearing of last year was 0. ==> 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
=959.5/182.6
=5.25465498

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=940.7/122.8
=7.66042345

Titanium Metals Corporation's current ratio of this year was 5.25465498. Titanium Metals Corporation's current ratio of last year was 7.66042345. ==> 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.

Titanium Metals Corporation's number of shares in issue this year was 178.1. Titanium Metals Corporation's number of shares in issue last year was 180.4. ==> There is the same number of shares in issue this year, or fewer. ==> Score 1.

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
=223.6/1045.2
=0.21393035

Gross Margin (Last Year)=Gross Profit/Revenue
=178.8/857.2
=0.20858609

Titanium Metals Corporation's gross margin of this year was 0.21393035. Titanium Metals Corporation's gross margin of last year was 0.20858609. ==> 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 (Dec10)
=1045.2/1498
=0.69773031

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec09)
=857.2/1378.6
=0.62179022

Titanium Metals Corporation's asset turnover of this year was 0.69773031. Titanium Metals Corporation's asset turnover of last year was 0.62179022. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+0+1+0+0+0+1+1+1
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Titanium Metals Corporation has an F-score of 5 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.

Titanium Metals Corporation Annual Data

Dec02Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11
Q1 0011111111
Q2 0101111110
Q3 0111100011
Q4 1100001110
Q5 0100100000
Q6 1101111100
Q7 0000001111
Q8 0111100011
Q9 0111100011
F-score 2746735575
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