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Twin Disc Inc (NAS:TWIN)
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

Twin Disc Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.

TWIN' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 4

3
8

During the past 13 years, the highest Piotroski F-Score of Twin Disc Inc was 8. The lowest was 3. And the median was 6.


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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 0.047 + 1.277 + 0.518 + -0.475 = $1.4 Mil.
Cash Flow from Operations was 13.674 + 9.722 + 9.895 + -1.83 = $31.5 Mil.
Revenue was 75.931 + 66.426 + 63.212 + 60.705 = $266.3 Mil.
Gross Profit was 20.623 + 20.667 + 18.544 + 16.528 = $76.4 Mil.
Average Total Assets from the begining of this year (Mar13)
to the end of this year (Mar14) was
(295.129 + 285.458 + 273.156 + 274.529 + 275.846) / 5 = $280.8 Mil.
Total Assets was $275.8 Mil.
Long-Term Debt was $21.4 Mil.
Total Current Assets was $183.2 Mil.
Total Current Liabilities was $55.8 Mil.
Net Income was 1.263 + 1.231 + 3.36 + -0.757 = $5.1 Mil.

Revenue was 96.109 + 68.793 + 72.325 + 68.232 = $305.5 Mil.
Gross Profit was 28.246 + 19.416 + 22.311 + 17.674 = $87.6 Mil.
Average Total Assets from the begining of last year (Mar12)
to the end of last year (Mar13) was
(325.361 + 303.832 + 300.099 + 299.576 + 295.129) / 5 = $304.8 Mil.
Total Assets was $295.1 Mil.
Long-Term Debt was $31.0 Mil.
Total Current Assets was $190.1 Mil.
Total Current Liabilities was $57.3 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Twin Disc Inc's current net income (ttm) was 1.4. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Twin Disc Inc's current cash flow from operations (ttm) was 31.5. ==> 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)/Average Total Assets from Mar13 to Mar14
=1.367/280.8236
=0.00486782

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Mar12 to Mar13
=5.097/304.7994
=0.01672247

Twin Disc Inc's return on assets of this year was 0.00486782. Twin Disc Inc's return on assets of last year was 0.01672247. ==> Last year is higher ==> Score 0.

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.

Twin Disc Inc's current net income (ttm) was 1.4. Twin Disc Inc's current cash flow from operations (ttm) was 31.5. ==> 31.5 > 1.4 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Mar14)=Long-Term Debt/Total Assets
=21.422/275.846
=0.07765927

Gearing (Last Year: Mar13)=Long-Term Debt/Total Assets
=31.009/295.129
=0.10506931

Twin Disc Inc's gearing of this year was 0.07765927. Twin Disc Inc's gearing of last year was 0.10506931. ==> 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: Mar14)=Total Current Assets/Total Current Liabilities
=183.174/55.786
=3.28351199

Current Ratio (Last Year: Mar13)=Total Current Assets/Total Current Liabilities
=190.12/57.32
=3.31681786

Twin Disc Inc's current ratio of this year was 3.28351199. Twin Disc Inc's current ratio of last year was 3.31681786. ==> 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.

Twin Disc Inc's number of shares in issue this year was 11.3. Twin Disc Inc's number of shares in issue last year was 11.2. ==> 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
=76.362/266.274
=0.28677978

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=87.647/305.459
=0.2869354

Twin Disc Inc's gross margin of this year was 0.28677978. Twin Disc Inc's gross margin of last year was 0.2869354. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout 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)/Average Total Assets from Mar13 to Mar14
=266.274/280.8236
=0.94818954

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Mar12 to Mar13
=305.459/304.7994
=1.00216405

Twin Disc Inc's asset turnover of this year was 0.94818954. Twin Disc Inc's asset turnover of last year was 1.00216405. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+0+0+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

Twin Disc Inc has an F-score of 4 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, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Twin Disc Inc Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Q1 1111111111
Q2 1111111111
Q3 1111001100
Q4 1100110011
Q5 1010011011
Q6 0111100111
Q7 0011110011
Q8 1110001001
Q9 1111001100
F-score 7786556567

Twin Disc Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1100000001
Q4 0001111111
Q5 0001111111
Q6 1111111001
Q7 0111111101
Q8 1000000001
Q9 1100000000
F-score 6546666547
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