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Trinity Industries Inc (NYSE:TRN)
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

Trinity Industries Inc has an F-score of 7 indicating the company's financial situation is typical for a stable company.

TRN' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Trinity Industries Inc was 9. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 164.2 + 226.4 + 112.8 + 99.6 = $603 Mil.
Cash Flow from Operations was -47.9 + 205.3 + 287.5 + 101.1 = $546 Mil.
Revenue was 1485.3 + 1460.5 + 1256 + 1110.3 = $5,312 Mil.
Gross Profit was 387 + 386.5 + 293.3 + 274 = $1,341 Mil.
Total Assets at the begining of this year (Jun13) was $6,901 Mil.
Total Assets was $8,014 Mil.
Long-Term Debt was $3,243 Mil.
Total Current Assets was $2,719 Mil.
Total Current Liabilities was $811 Mil.
Net Income was 84 + 79.1 + 71.3 + 63.2 = $298 Mil.

Revenue was 1066.1 + 932.9 + 920.7 + 937.5 = $3,857 Mil.
Gross Profit was 253.9 + 221.8 + 202.7 + 181.9 = $860 Mil.
Total Assets at the begining of last year (Jun12) was $6,198 Mil.
Total Assets was $6,901 Mil.
Long-Term Debt was $2,884 Mil.
Total Current Assets was $1,800 Mil.
Total Current Liabilities was $778 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.

Trinity Industries Inc's current net income was 603. ==> 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.

Trinity Industries Inc's current cash flow from operations was 546. ==> 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 (Jun13)
=603/6900.7
=0.08738244

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=297.6/6197.5
=0.04801936

Trinity Industries Inc's return on assets of this year was 0.08738244. Trinity Industries Inc's return on assets of last year was 0.04801936. ==> 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.

Trinity Industries Inc's current net income was 603. Trinity Industries Inc's current cash flow from operations was 546. ==> 546 =< 603 ==> 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)=Long-Term Debt/Total Assets
=3242.5/8014.1
=0.40459939

Gearing (Last Year)=Long-Term Debt/Total Assets
=2884.2/6900.7
=0.4179576

Trinity Industries Inc's gearing of this year was 0.40459939. Trinity Industries Inc's gearing of last year was 0.4179576. ==> 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)=Total Current Assets/Total Current Liabilities
=2719.3/810.5
=3.35508945

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1800.2/777.7
=2.31477433

Trinity Industries Inc's current ratio of this year was 3.35508945. Trinity Industries Inc's current ratio of last year was 2.31477433. ==> This year's current ratio is higher. ==> Score 1.

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.

Trinity Industries Inc's number of shares in issue this year was 157.4. Trinity Industries Inc's number of shares in issue last year was 154.1. ==> 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)=Gross Profit/Revenue
=1340.8/5312.1
=0.25240489

Gross Margin (Last Year)=Gross Profit/Revenue
=860.3/3857.2
=0.22303744

Trinity Industries Inc's gross margin of this year was 0.25240489. Trinity Industries Inc's gross margin of last year was 0.22303744. ==> 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 (Jun13)
=5312.1/6900.7
=0.76979147

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=3857.2/6197.5
=0.62237999

Trinity Industries Inc's asset turnover of this year was 0.76979147. Trinity Industries Inc's asset turnover of last year was 0.62237999. ==> 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+1+0+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Trinity Industries Inc 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.

Trinity Industries Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 0111101111
Q2 0111111111
Q3 1110001111
Q4 0101111011
Q5 0001000111
Q6 1011010011
Q7 0000110011
Q8 0111101011
Q9 1100000111
F-score 3656545599

Trinity Industries Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1111111111
Q4 1111111110
Q5 1111111111
Q6 1111000111
Q7 0011111110
Q8 0001111111
Q9 1111100111
F-score 7789877997
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