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T. Rowe Price Group Inc (NAS:TROW)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

T. Rowe Price Group Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

TROW' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 6

3
8

During the past 13 years, the highest Piotroski F-Score of T. Rowe Price Group Inc 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 287.7 + 270.3 + 247.8 + 241.9 = $1,048 Mil.
Cash Flow from Operations was 74.9 + 430.4 + 268.5 + 459.4 = $1,233 Mil.
Revenue was 929.8 + 884.4 + 854.3 + 815.7 = $3,484 Mil.
Gross Profit was 929.8 + 884.4 + 791.1 + 789.5 = $3,395 Mil.
Total Assets at the begining of this year (Dec12) was $4,203 Mil.
Total Assets was $5,033 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,797 Mil.
Total Current Liabilities was $215 Mil.
Net Income was 232 + 247.3 + 206.8 + 197.5 = $884 Mil.

Revenue was 787.3 + 769.7 + 736.8 + 728.7 = $3,023 Mil.
Gross Profit was 787.3 + 769.7 + 681.7 + 706.5 = $2,945 Mil.
Total Assets at the begining of last year (Dec11) was $3,770 Mil.
Total Assets was $4,203 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,233 Mil.
Total Current Liabilities was $357 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.

T. Rowe Price Group Inc's current net income was 1,048. ==> 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.

T. Rowe Price Group Inc's current cash flow from operations was 1,233. ==> 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)
=1047.7/4202.8
=0.24928619

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=883.6/3770.3
=0.23435801

T. Rowe Price Group Inc's return on assets of this year was 0.24928619. T. Rowe Price Group Inc's return on assets of last year was 0.23435801. ==> 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.

T. Rowe Price Group Inc's current net income was 1,048. T. Rowe Price Group Inc's current cash flow from operations was 1,233. ==> 1,233 > 1,048 ==> 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
=0/5033.1
=0

Gearing (Last Year)=Long-Term Debt/Total Assets
=0/4202.8
=0

T. Rowe Price Group Inc's gearing of this year was 0. T. Rowe Price Group Inc'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
=1796.8/215
=8.3572093

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1233/356.7
=3.45668629

T. Rowe Price Group Inc's current ratio of this year was 8.3572093. T. Rowe Price Group Inc's current ratio of last year was 3.45668629. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

T. Rowe Price Group Inc's number of shares in issue this year was 267.5. T. Rowe Price Group Inc's number of shares in issue last year was 261.9. ==> 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
=3394.8/3484.2
=0.97434131

Gross Margin (Last Year)=Gross Profit/Revenue
=2945.2/3022.5
=0.97442514

T. Rowe Price Group Inc's gross margin of this year was 0.97434131. T. Rowe Price Group Inc's gross margin of last year was 0.97442514. ==> Last year's gross margin is higher ==> Score 0.

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)
=3484.2/4202.8
=0.82901875

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=3022.5/3770.3
=0.80166035

T. Rowe Price Group Inc's asset turnover of this year was 0.82901875. T. Rowe Price Group Inc's asset turnover of last year was 0.80166035. ==> 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+0+1+0+0+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

T. Rowe Price Group 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.

T. Rowe Price Group Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1111001111
Q4 1111111111
Q5 0000000000
Q6 0001111101
Q7 0000110110
Q8 0001000010
Q9 1011001111
F-score 5457556776

T. Rowe Price Group Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1100111111
Q4 1111111111
Q5 0000000000
Q6 1111100001
Q7 1101000000
Q8 0000011110
Q9 0000011111
F-score 6645566666
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