Switch to:
Toll Brothers Inc (NYSE:TOL)
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

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

TOL' s 10-Year Piotroski F-Score Range
Min: 2   Max: 7
Current: 6

2
7

During the past 13 years, the highest Piotroski F-Score of Toll Brothers Inc was 7. The lowest was 2. And the median was 4.


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 (Oct14) TTM:Last Year (Oct13) TTM:
Net Income was 45.58 + 65.222 + 97.707 + 131.524 = $340 Mil.
Cash Flow from Operations was -250.388 + 184.203 + 104.801 + 0 = $39 Mil.
Revenue was 643.681 + 860.374 + 1056.857 + 1350.69 = $3,912 Mil.
Gross Profit was 129.649 + 172.376 + 239.625 + 288.115 = $830 Mil.
Average Total Assets from the begining of this year (Oct13)
to the end of this year (Oct14) was
(6827.459 + 7760.255 + 8245.066 + 8331.916 + 8416.902) / 5 = $7916.3196 Mil.
Total Assets at the begining of this year (Oct13) was $6,827 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $7,107 Mil.
Total Current Liabilities was $4,556 Mil.
Net Income was 4.432 + 24.674 + 46.595 + 94.905 = $171 Mil.

Revenue was 424.601 + 516.004 + 689.16 + 1044.534 = $2,674 Mil.
Gross Profit was 78.664 + 95.991 + 144.071 + 222.273 = $541 Mil.
Average Total Assets from the begining of last year (Oct12)
to the end of last year (Oct13) was
(6181.044 + 6118.251 + 6558.605 + 6787.543 + 6827.459) / 5 = $6494.5804 Mil.
Total Assets at the begining of last year (Oct12) was $6,181 Mil.
Long-Term Debt was $2,504 Mil.
Total Current Assets was $5,508 Mil.
Total Current Liabilities was $985 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.

Toll Brothers Inc's current net income (TTM) was 340. ==> 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.

Toll Brothers Inc's current cash flow from operations (TTM) was 39. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Oct13)
=340.033/6827.459
=0.04980374

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Oct12)
=170.606/6181.044
=0.02760149

Toll Brothers Inc's return on assets of this year was 0.04980374. Toll Brothers Inc's return on assets of last year was 0.02760149. ==> 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.

Toll Brothers Inc's current net income (TTM) was 340. Toll Brothers Inc's current cash flow from operations (TTM) was 39. ==> 39 <= 340 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=0/7916.3196
=0

Gearing (Last Year: Oct13)=Long-Term Debt/Average Total Assets from Oct12 to Oct13
=2503.664/6494.5804
=0.3855005

Toll Brothers Inc's gearing of this year was 0. Toll Brothers Inc's gearing of last year was 0.3855005. ==> This year is lower or equal to last year. ==> 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: Oct14)=Total Current Assets/Total Current Liabilities
=7107.004/4556.205
=1.55985167

Current Ratio (Last Year: Oct13)=Total Current Assets/Total Current Liabilities
=5507.928/984.631
=5.59390066

Toll Brothers Inc's current ratio of this year was 1.55985167. Toll Brothers Inc's current ratio of last year was 5.59390066. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Toll Brothers Inc's number of shares in issue this year was 185.7. Toll Brothers Inc's number of shares in issue last year was 178. ==> There is larger 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: TTM)=Gross Profit/Revenue
=829.765/3911.602
=0.2121292

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=540.999/2674.299
=0.20229563

Toll Brothers Inc's gross margin of this year was 0.2121292. Toll Brothers Inc's gross margin of last year was 0.20229563. ==> This year's gross margin is higher. ==> Score 1.

Q9. 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 (Oct13)
=3911.602/6827.459
=0.57292208

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Oct12)
=2674.299/6181.044
=0.43266138

Toll Brothers Inc's asset turnover of this year was 0.57292208. Toll Brothers Inc's asset turnover of last year was 0.43266138. ==> 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+0+1+0+0+1+1
=6

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

Toll Brothers 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.

Toll Brothers Inc Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
Q1 1110001111
Q2 1011101000
Q3 1000011101
Q4 0011101000
Q5 1010010011
Q6 1101101100
Q7 0111000000
Q8 1000011111
Q9 1000001111
F-score 7354337545

Toll Brothers Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Q1 1111111111
Q2 0000000001
Q3 1111100001
Q4 0000000000
Q5 0000010011
Q6 1110001100
Q7 0000000000
Q8 1111111111
Q9 1111111111
F-score 5554444446
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