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United Rentals Inc (NYSE:URI)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

United Rentals Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

URI' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of United Rentals Inc was 9. 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 local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Net Income was 169 + 92 + 134 + 187 = $582 Mil.
Cash Flow from Operations was 438 + 604 + 643 + 383 = $2,068 Mil.
Revenue was 1523 + 1310 + 1421 + 1508 = $5,762 Mil.
Gross Profit was 648 + 500 + 590 + 656 = $2,394 Mil.
Average Total Assets from the begining of this year (Sep15)
to the end of this year (Sep16) was
(12598 + 12083 + 11784 + 12120 + 12275) / 5 = $12172 Mil.
Total Assets at the begining of this year (Sep15) was $12,598 Mil.
Long-Term Debt was $7,393 Mil.
Total Current Assets was $1,354 Mil.
Total Current Liabilities was $1,420 Mil.
Net Income was 194 + 115 + 86 + 215 = $610 Mil.

Revenue was 1564 + 1315 + 1429 + 1550 = $5,858 Mil.
Gross Profit was 707 + 524 + 618 + 690 = $2,539 Mil.
Average Total Assets from the begining of last year (Sep14)
to the end of last year (Sep15) was
(12483 + 12129 + 12282 + 12605 + 12598) / 5 = $12419.4 Mil.
Total Assets at the begining of last year (Sep14) was $12,483 Mil.
Long-Term Debt was $7,876 Mil.
Total Current Assets was $1,426 Mil.
Total Current Liabilities was $1,517 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.

United Rentals Inc's current net income (TTM) was 582. ==> 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.

United Rentals Inc's current cash flow from operations (TTM) was 2,068. ==> 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.

United Rentals Inc's return on assets of this year was 0.04619781. United Rentals Inc's return on assets of last year was 0.04886646. ==> 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.

United Rentals Inc's current net income (TTM) was 582. United Rentals Inc's current cash flow from operations (TTM) was 2,068. ==> 2,068 > 582 ==> 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: Sep16)=Long-Term Debt/Average Total Assets from Sep15 to Sep16
=7393/12172
=0.60737759

Gearing (Last Year: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=7876/12419.4
=0.63416912

United Rentals Inc's gearing of this year was 0.60737759. United Rentals Inc's gearing of last year was 0.63416912. ==> 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: Sep16)=Total Current Assets/Total Current Liabilities
=1354/1420
=0.95352113

Current Ratio (Last Year: Sep15)=Total Current Assets/Total Current Liabilities
=1426/1517
=0.94001318

United Rentals Inc's current ratio of this year was 0.95352113. United Rentals Inc's current ratio of last year was 0.94001318. ==> 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.

United Rentals Inc's number of shares in issue this year was 86.4. United Rentals Inc's number of shares in issue last year was 95.2. ==> 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
=2394/5762
=0.41548074

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2539/5858
=0.43342438

United Rentals Inc's gross margin of this year was 0.41548074. United Rentals Inc's gross margin of last year was 0.43342438. ==> Last year's gross margin is higher ==> Score 0.

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 (Sep15)
=5762/12598
=0.45737419

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=5858/12483
=0.46927822

United Rentals Inc's asset turnover of this year was 0.45737419. United Rentals Inc's asset turnover of last year was 0.46927822. ==> 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+0+0
=6

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

United Rentals 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 local exchange's currency.

United Rentals Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1100011111
Question 2 1111111111
Question 3 1101110111
Question 4 1111111111
Question 5 1100110101
Question 6 0100001101
Question 7 0111000011
Question 8 1000111110
Question 9 0101111010
F-score 6835676777

United Rentals Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Question 1 1111111111
Question 2 1111111111
Question 3 1111111010
Question 4 1111111111
Question 5 0000101111
Question 6 0000111101
Question 7 1111111111
Question 8 1111110000
Question 9 1111100000
F-score 7777977666
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