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Universal Forest Products Inc. (NAS:UFPI)
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

Universal Forest Products Inc. has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

UFPI' s 10-Year Piotroski F-Score Range
Min: 4   Max: 7
Current: 7

4
7

During the past 13 years, the highest Piotroski F-Score of Universal Forest Products Inc. was 7. The lowest was 4. 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 7.216 + 7.995 + 14.091 + 15.772 = $45 Mil.
Cash Flow from Operations was -54.732 + 5.623 + 76.655 + 35.657 = $63 Mil.
Revenue was 553.998 + 525.737 + 651.78 + 738.436 = $2,470 Mil.
Gross Profit was 66.012 + 64.868 + 78.289 + 80.216 = $289 Mil.
Total Assets at the begining of this year (Mar13) was $967 Mil.
Total Assets was $1,007 Mil.
Long-Term Debt was $143 Mil.
Total Current Assets was $582 Mil.
Total Current Liabilities was $160 Mil.
Net Income was 5.224 + -1.928 + 4.198 + 17.509 = $25 Mil.

Revenue was 554.494 + 470.763 + 533.366 + 593.693 = $2,152 Mil.
Gross Profit was 57.179 + 44.141 + 55.227 + 72.075 = $229 Mil.
Total Assets at the begining of last year (Mar12) was $839 Mil.
Total Assets was $967 Mil.
Long-Term Debt was $155 Mil.
Total Current Assets was $550 Mil.
Total Current Liabilities was $154 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.

Universal Forest Products Inc.'s current net income was 45. ==> 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.

Universal Forest Products Inc.'s current cash flow from operations was 63. ==> 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 (Mar13)
=45.074/966.95
=0.04661461

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=25.003/839.39
=0.02978711

Universal Forest Products Inc.'s return on assets of this year was 0.04661461. Universal Forest Products Inc.'s return on assets of last year was 0.02978711. ==> 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.

Universal Forest Products Inc.'s current net income was 45. Universal Forest Products Inc.'s current cash flow from operations was 63. ==> 63 > 45 ==> 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
=143.471/1006.784
=0.14250425

Gearing (Last Year)=Long-Term Debt/Total Assets
=155.181/966.95
=0.16048503

Universal Forest Products Inc.'s gearing of this year was 0.14250425. Universal Forest Products Inc.'s gearing of last year was 0.16048503. ==> This year is lower. ==> 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
=582.352/160.22
=3.63470228

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=550.075/153.828
=3.57590946

Universal Forest Products Inc.'s current ratio of this year was 3.63470228. Universal Forest Products Inc.'s current ratio of last year was 3.57590946. ==> 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.

Universal Forest Products Inc.'s number of shares in issue this year was 0. Universal Forest Products Inc.'s number of shares in issue last year was 19.7. ==> There is the same number of shares in issue this year, or fewer. ==> Score 1.

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
=289.385/2469.951
=0.11716224

Gross Margin (Last Year)=Gross Profit/Revenue
=228.622/2152.316
=0.10622139

Universal Forest Products Inc.'s gross margin of this year was 0.11716224. Universal Forest Products Inc.'s gross margin of last year was 0.10622139. ==> 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 (Mar13)
=2469.951/966.95
=2.55437303

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=2152.316/839.39
=2.56414301

Universal Forest Products Inc.'s asset turnover of this year was 2.55437303. Universal Forest Products Inc.'s asset turnover of last year was 2.56414301. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+1+1+1+0
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Universal Forest Products Inc. has an F-score of 8. 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 own currency.

Universal Forest Products Inc. Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111101
Q3 1100010011
Q4 1111111101
Q5 1110110101
Q6 0111011010
Q7 0001100000
Q8 0110010001
Q9 1000001011
F-score 6765575447

Universal Forest Products Inc. Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111000111
Q3 0011110111
Q4 1110000111
Q5 1111000011
Q6 0100111101
Q7 0000100001
Q8 0011000011
Q9 0011111110
F-score 4576543670
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