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Toro Co (NYSE:TTC)
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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Toro Co has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

TTC' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 9
Current: 7

4
9

During the past 13 years, the highest Piotroski F-Score of Toro Co was 9. The lowest was 4. And the median was 7.


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 local exchange's currency.

This Year (Jul16) TTM:Last Year (Jul15) TTM:
Net Income was 23.554 + 39.261 + 105.681 + 55.822 = $224 Mil.
Cash Flow from Operations was 68.855 + 1.24 + 135.914 + 151.753 = $358 Mil.
Revenue was 480.807 + 486.398 + 836.441 + 600.98 = $2,405 Mil.
Gross Profit was 168.574 + 182.654 + 303.187 + 216.617 = $871 Mil.
Average Total Assets from the begining of this year (Jul15)
to the end of this year (Jul16) was
(1359.951 + 1303.658 + 1393.834 + 1542.741 + 1467.462) / 5 = $1413.5292 Mil.
Total Assets at the begining of this year (Jul15) was $1,360 Mil.
Long-Term Debt was $335 Mil.
Total Current Assets was $885 Mil.
Total Current Liabilities was $513 Mil.
Net Income was 10.902 + 30.95 + 93.763 + 53.324 = $189 Mil.

Revenue was 414.14 + 474.211 + 826.242 + 609.615 = $2,324 Mil.
Gross Profit was 143.137 + 168.999 + 281.972 + 216.39 = $810 Mil.
Average Total Assets from the begining of last year (Jul14)
to the end of last year (Jul15) was
(1127.827 + 1192.415 + 1322.168 + 1479.127 + 1359.951) / 5 = $1296.2976 Mil.
Total Assets at the begining of last year (Jul14) was $1,128 Mil.
Long-Term Debt was $358 Mil.
Total Current Assets was $771 Mil.
Total Current Liabilities was $499 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.

Toro Co's current net income (TTM) was 224. ==> 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.

Toro Co's current cash flow from operations (TTM) was 358. ==> 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 (Jul15)
=224.318/1359.951
=0.16494565

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jul14)
=188.939/1127.827
=0.16752481

Toro Co's return on assets of this year was 0.16494565. Toro Co's return on assets of last year was 0.16752481. ==> 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.

Toro Co's current net income (TTM) was 224. Toro Co's current cash flow from operations (TTM) was 358. ==> 358 > 224 ==> 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: Jul16)=Long-Term Debt/Average Total Assets from Jul15 to Jul16
=334.658/1413.5292
=0.23675351

Gearing (Last Year: Jul15)=Long-Term Debt/Average Total Assets from Jul14 to Jul15
=358.053/1296.2976
=0.27621204

Toro Co's gearing of this year was 0.23675351. Toro Co's gearing of last year was 0.27621204. ==> 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: Jul16)=Total Current Assets/Total Current Liabilities
=885.466/513.411
=1.72467283

Current Ratio (Last Year: Jul15)=Total Current Assets/Total Current Liabilities
=771.417/498.971
=1.5460157

Toro Co's current ratio of this year was 1.72467283. Toro Co's current ratio of last year was 1.5460157. ==> 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.

Toro Co's number of shares in issue this year was 112.1. Toro Co's number of shares in issue last year was 113.1. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=871.032/2404.626
=0.3622318

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=810.498/2324.208
=0.34872008

Toro Co's gross margin of this year was 0.3622318. Toro Co's gross margin of last year was 0.34872008. ==> 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 (Jul15)
=2404.626/1359.951
=1.76817106

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jul14)
=2324.208/1127.827
=2.06078415

Toro Co's asset turnover of this year was 1.76817106. Toro Co's asset turnover of last year was 2.06078415. ==> 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+1+1+0
=7

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

Toro Co has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


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 local exchange's currency.

Toro Co Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
Question 1 1111111111
Question 2 1111111111
Question 3 1110011111
Question 4 1111110111
Question 5 1100001110
Question 6 0111000111
Question 7 1111111111
Question 8 0110010111
Question 9 1110011100
F-score 7985476987

Toro Co Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
Question 1 1111111111
Question 2 1111111111
Question 3 0111110000
Question 4 1110101111
Question 5 1100001111
Question 6 0010000111
Question 7 1111111111
Question 8 0011000011
Question 9 0101100000
F-score 5776645677
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