Switch to:
Brown-Forman Corp  (NYSE:BF.B) Piotroski F-Score: 4 (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

Brown-Forman Corp has an F-score of 4 indicating the company's financial situation is typical for a stable company.

NYSE:BF.B' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 9
Current: 4

2
9

During the past 13 years, the highest Piotroski F-Score of Brown-Forman Corp was 9. The lowest was 2. And the median was 6.


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.

Brown-Forman Corp Annual Data

Apr08 Apr09 Apr10 Apr11 Apr12 Apr13 Apr14 Apr15 Apr16 Apr17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.00 8.00 5.00 5.00 3.00

Brown-Forman Corp Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17
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 5.00 5.00 4.00 3.00 4.00

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.

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 (Jul17) TTM:Last Year (Jul16) TTM:
Net Income was 197 + 182 + 145 + 178 = $702 Mil.
Cash Flow from Operations was 41 + 276 + 194 + 102 = $613 Mil.
Revenue was 830 + 808 + 695 + 723 = $3,056 Mil.
Gross Profit was 552 + 536 + 480 + 493 = $2,061 Mil.
Average Total Assets from the begining of this year (Jul16)
to the end of this year (Jul17) was
(4755 + 4720 + 4600 + 4625 + 4802) / 5 = $4700.4 Mil.
Total Assets at the begining of this year ({FiscalYear0}) was $4,755 Mil.
Long-Term Debt & Capital Lease Obligation was $1,720 Mil.
Total Current Assets was $2,503 Mil.
Total Current Liabilities was $1,089 Mil.
Total Assets was 200 + 190 + 522 + 144 = $1,056 Mil.

Revenue was 854 + 809 + 729 + 661 = $3,053 Mil.
Gross Profit was 586 + 555 + 513 + 453 = $2,107 Mil.
Average Total Assets from the begining of last year (Jul15)
to the end of last year (Jul16) was
(4334 + 4319 + 4333 + 4183 + 4755) / 5 = $4384.8 Mil.
Total Assets at the begining of last year (Jul15) was $4,334 Mil.
Long-Term Debt & Capital Lease Obligation was $1,953 Mil.
Total Current Assets was $2,561 Mil.
Total Current Liabilities was $874 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.

Brown-Forman Corp's current Net Income (TTM) was {NetIncome0_f}. ==> 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.

Brown-Forman Corp's current Cash Flow from Operations (TTM) was 613. ==> 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(Jul16)
=702/4755
=0.14763407

ROA (Last Year)=Net Income/Total Assets(Jul15)
=1056/4334
=0.24365482

Brown-Forman Corp's return on assets of this year was 0.14763407. Brown-Forman Corp's return on assets of last year was 0.24365482. ==> 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.

Brown-Forman Corp's current Net Income (TTM) was 702. Brown-Forman Corp's current Cash Flow from Operations (TTM) was 613. ==> 613 <= 702 ==> CFROA <= ROA ==> Score 0.

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: Jul17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jul16 to Jul17
=1720/4700.4
=0.3659263

Gearing (Last Year: Jul16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jul15 to Jul16
=1953/4384.8
=0.4454023

Brown-Forman Corp's gearing of this year was 0.3659263. Brown-Forman Corp's gearing of last year was 0.4454023. ==> 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: Jul17)=Total Current Assets/Total Current Liabilities
=2503/1089
=2.29843893

Current Ratio (Last Year: Jul16)=Total Current Assets/Total Current Liabilities
=2561/874
=2.93020595

Brown-Forman Corp's current ratio of this year was 2.29843893. Brown-Forman Corp's current ratio of last year was 2.93020595. ==> 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.

Brown-Forman Corp's number of shares in issue this year was 386.4. Brown-Forman Corp's number of shares in issue last year was 396. ==> 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
=2061/3056
=0.67441099

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2107/3053
=0.69014085

Brown-Forman Corp's gross margin of this year was 0.67441099. Brown-Forman Corp's gross margin of last year was 0.69014085. ==> 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/Total Assets at the Beginning of This Year (Jul16)
=3056/4755
=0.6426919

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jul15)
=3053/4334
=0.70443009

Brown-Forman Corp's asset turnover of this year was 0.6426919. Brown-Forman Corp's asset turnover of last year was 0.70443009. ==> 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+0+1+0+1+0+0
=4

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

Brown-Forman Corp 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


Headlines

No Headline

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK