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Arch Coal Piotroski F-Score

: 7 (As of Today)
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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

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

NYSE:ARCH' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 9
Current: 7

1
9

During the past 13 years, the highest Piotroski F-Score of Arch Coal was 9. The lowest was 1. And the median was 5.


Arch Coal Piotroski F-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Arch Coal Annual Data
Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.00 3.00 5.00 7.00 8.00

Arch Coal Quarterly Data
Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.00 8.00 7.00 8.00 7.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Arch Coal Piotroski F-Score Distribution

* The bar in red indicates where Arch Coal's Piotroski F-Score falls into.


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 (Sep19) TTM:Last Year (Sep18) TTM:
Net Income was 86.094 + 72.741 + 62.84 + 106.769 = $328 Mil.
Cash Flow from Operations was 151.848 + 84.984 + 140.922 + 108.147 = $486 Mil.
Revenue was 650.963 + 555.183 + 570.222 + 619.467 = $2,396 Mil.
Gross Profit was 109.422 + 91.439 + 92.61 + 98.061 = $392 Mil.
Average Total Assets from the begining of this year (Sep18)
to the end of this year (Sep19) was
(1997.622 + 1887.06 + 1863.201 + 1889.53 + 1934.6) / 5 = $1914.4026 Mil.
Total Assets at the begining of this year (Sep18) was $1,998 Mil.
Long-Term Debt & Capital Lease Obligation was $293 Mil.
Total Current Assets was $867 Mil.
Total Current Liabilities was $340 Mil.
Net Income was 81.271 + 59.985 + 43.306 + 123.192 = $308 Mil.

Revenue was 560.244 + 575.295 + 592.349 + 633.18 = $2,361 Mil.
Gross Profit was 81.617 + 90.812 + 87.412 + 119.376 = $379 Mil.
Average Net Income from the begining of last year (Sep17)
to the end of last year (Sep18) was
(2022.533 + 1979.632 + 1976.678 + 1949.413 + 1997.622) / 5 = $1985.1756 Mil.
Total Assets at the begining of last year (Sep17) was $2,023 Mil.
Long-Term Debt & Capital Lease Obligation was $303 Mil.
Total Current Assets was $877 Mil.
Total Current Liabilities was $335 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.

Arch Coal's current Net Income (TTM) was 328. ==> 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.

Arch Coal's current Cash Flow from Operations (TTM) was 486. ==> 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/Total Assets(Sep18)
=328.444/1997.622
=0.16441749

ROA (Last Year)=Net Income/Total Assets(Sep17)
=307.754/2022.533
=0.15216266

Arch Coal's return on assets of this year was 0.16441749. Arch Coal's return on assets of last year was 0.15216266. ==> This year is higher. ==> Score 1.

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.

Arch Coal's current Net Income (TTM) was 328. Arch Coal's current Cash Flow from Operations (TTM) was 486. ==> 486 > 328 ==> 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: Sep19)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Sep18 to Sep19
=292.781/1914.4026
=0.15293596

Gearing (Last Year: Sep18)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Sep17 to Sep18
=302.83/1985.1756
=0.1525457

Arch Coal's gearing of this year was 0.15293596. Arch Coal's gearing of last year was 0.1525457. ==> Last year is lower than this year ==> Score 0.

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: Sep19)=Total Current Assets/Total Current Liabilities
=866.969/339.993
=2.54996132

Current Ratio (Last Year: Sep18)=Total Current Assets/Total Current Liabilities
=877.417/334.774
=2.62092337

Arch Coal's current ratio of this year was 2.54996132. Arch Coal's current ratio of last year was 2.62092337. ==> Last year's current ratio is higher ==> Score 0.

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.

Arch Coal's number of shares in issue this year was 16.9. Arch Coal's number of shares in issue last year was 20.2. ==> 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
=391.532/2395.835
=0.16342194

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=379.217/2361.068
=0.16061249

Arch Coal's gross margin of this year was 0.16342194. Arch Coal's gross margin of last year was 0.16061249. ==> 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/Total Assets at the Beginning of This Year (Sep18)
=2395.835/1997.622
=1.19934352

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Sep17)
=2361.068/2022.533
=1.16738169

Arch Coal's asset turnover of this year was 1.19934352. Arch Coal's asset turnover of last year was 1.16738169. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+0+0+1+1+1
=7

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

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

Arch Coal  (NYSE:ARCH) Piotroski F-Score 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.


Arch Coal Piotroski F-Score Related Terms


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