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Cerence (Cerence) Piotroski F-Score

: 6 (As of Today)
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The zones of discrimination were as such:

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

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

The historical rank and industry rank for Cerence's Piotroski F-Score or its related term are showing as below:

CRNC' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Med: 5   Max: 8
Current: 6

During the past 8 years, the highest Piotroski F-Score of Cerence was 8. The lowest was 1. And the median was 5.


Cerence Piotroski F-Score Historical Data

The historical data trend for Cerence's Piotroski F-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Array ( [0] => - [1] => - [2] => - [3] => N/A [4] => 5.00 [5] => 8.00 [6] => 2.00 [7] => 4.00 )
Cerence Annual Data
Trend Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22 Sep23
Piotroski F-Score
Premium Member Only Premium Member Only Premium Member Only N/A 5.00 8.00 2.00 4.00

Cerence Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
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 2.00 1.00 1.00 4.00 6.00

Competitive Comparison

For the Software - Application subindustry, Cerence's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score data, can be viewed below:

* 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. Note that "N/A" values will not show up in the chart.


Cerence Piotroski F-Score Distribution

For the Software industry and Technology sector, Cerence's Piotroski F-Score distribution charts can be found below:

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


How is the Piotroski F-Score calculated?

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Dec23) TTM:Last Year (Dec22) TTM:
Net Income was -26.089 + -16.455 + -11.552 + 23.857 = $-30.2 Mil.
Cash Flow from Operations was 6.555 + -8.197 + 11.258 + -2.815 = $6.8 Mil.
Revenue was 68.393 + 61.66 + 80.764 + 138.335 = $349.2 Mil.
Gross Profit was 43.379 + 40.722 + 57.736 + 112 = $253.8 Mil.
Average Total Assets from the begining of this year (Dec22)
to the end of this year (Dec23) was
(1348.288 + 1335.447 + 1312.178 + 1297.59 + 1264.908) / 5 = $1311.6822 Mil.
Total Assets at the begining of this year (Dec22) was $1,348.3 Mil.
Long-Term Debt & Capital Lease Obligation was $285.5 Mil.
Total Current Assets was $228.4 Mil.
Total Current Liabilities was $120.0 Mil.
Net Income was -0.476 + -99.267 + -230.127 + -2.158 = $-332.0 Mil.

Revenue was 86.28 + 89.041 + 58.144 + 83.658 = $317.1 Mil.
Gross Profit was 61.974 + 64.789 + 33.761 + 57.475 = $218.0 Mil.
Average Total Assets from the begining of last year (Dec21)
to the end of last year (Dec22) was
(1692.425 + 1702.527 + 1576.837 + 1318.493 + 1348.288) / 5 = $1527.714 Mil.
Total Assets at the begining of last year (Dec21) was $1,692.4 Mil.
Long-Term Debt & Capital Lease Obligation was $279.4 Mil.
Total Current Assets was $242.3 Mil.
Total Current Liabilities was $165.3 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

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.

Cerence's current Net Income (TTM) was -30.2. ==> Negative ==> Score 0.

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.

Cerence's current Cash Flow from Operations (TTM) was 6.8. ==> 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 (Dec22)
=-30.239/1348.288
=-0.0224277

ROA (Last Year)=Net Income/Total Assets (Dec21)
=-332.028/1692.425
=-0.19618476

Cerence's return on assets of this year was -0.0224277. Cerence's return on assets of last year was -0.19618476. ==> 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.

Cerence's current Net Income (TTM) was -30.2. Cerence's current Cash Flow from Operations (TTM) was 6.8. ==> 6.8 > -30.2 ==> 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: Dec23)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Dec22 to Dec23
=285.485/1311.6822
=0.21764799

Gearing (Last Year: Dec22)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Dec21 to Dec22
=279.413/1527.714
=0.18289614

Cerence's gearing of this year was 0.21764799. Cerence's gearing of last year was 0.18289614. ==> 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: Dec23)=Total Current Assets/Total Current Liabilities
=228.361/119.979
=1.90334142

Current Ratio (Last Year: Dec22)=Total Current Assets/Total Current Liabilities
=242.278/165.34
=1.46533204

Cerence's current ratio of this year was 1.90334142. Cerence's current ratio of last year was 1.46533204. ==> 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.

Cerence's number of shares in issue this year was 49.255. Cerence's number of shares in issue last year was 39.962. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=253.837/349.152
=0.72701001

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=217.999/317.123
=0.68742728

Cerence's gross margin of this year was 0.72701001. Cerence's gross margin of last year was 0.68742728. ==> 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 (Dec22)
=349.152/1348.288
=0.25895951

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Dec21)
=317.123/1692.425
=0.18737787

Cerence's asset turnover of this year was 0.25895951. Cerence's asset turnover of last year was 0.18737787. ==> 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
=0+1+1+1+0+1+0+1+1
=6

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

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

Cerence  (NAS:CRNC) 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.


Cerence Piotroski F-Score Related Terms

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Cerence (Cerence) Business Description

Traded in Other Exchanges
Address
1 Burlington Woods Drive, Suite 301A, Burlington, MA, USA, 01803
Cerence Inc is a United States-based software company. It is involved in developing mobility-based solutions for drivers and their cars. The customers include all automobile original equipment manufacturers, or OEMs, or their tier 1 suppliers. The company's revenue is generated by selling software licenses and cloud-connected services. Geographically, it derives a majority of its revenue from the United States and also has a presence in Other Americas; Germany; Other Europe, the Middle East, Africa; Japan, and Other Asia-Pacific.
Executives
Stefan Ortmanns officer: Executive Vice President WALTER-SCHEIBLER-STR 24, MONSCHAU 2M 52156
Iqbal Arshad officer: EVP, CTO CERENCE INC., 1 BURLINGTON WOODS DRIVE, SUITE 301A, BURLINGTON MA 01803
Thomas L Beaudoin director NUANCE COMMUNICATIONS, INC., 1 WAYSIDE ROAD, BURLINGTON MA 01803
Marcy S Klevorn director ONE AMERICAN ROAD, DEARBORN MI 48126
Prateek Kathpal officer: EVP & CTO 1 BURLINGTON WOODS DRIVE, BURLINGTON MA 01803
Christophe Couvreur officer: SVP, Core BU 1 BURLINGTON WOODS DRIVE, BURLINGTON MA 01803
Douglas Lee Davis director 1150 N. ALMA SCHOOL ROAD, MESA AZ 85201
Marc Montagner officer: Chief Financial Officer C/O ENDURANCE INT'L GROUP HOLDINGS, INC., 10 CORPORATE DRIVE, SUITE 300, BURLINGTON MA 01803
Sanjay Dhawan director, officer: Chief Executive Officer C/O HARMAN INTERNATIONAL INDUSTRIES, INC, 400 ATLANTIC STREET, STAMFORD CT 06901
Leanne Fitzgerald director, officer: Vice President and Secretary 1 WAYSIDE ROAD, BURLINGTON MA 01803
Mark J Gallenberger officer: President LTX-CREDENCE CORPORATION, 825 UNIVERSITY AVENUE, NORWOOD MA 02062
Alfred A Nietzel director ONE ADP BOULEVARD, ROSELAND NJ 07068
Kristi Ann Matus director C/O EQUITABLE HOLDINGS, INC., 1290 AVENUE OF THE AMERICAS, NEW YORK NY 10104
Marianne Budnik director C/O ACME PACKET, INC., 100 CROSBY DRIVE, BEDFORD MA 01730
Sanjay K Jha director 15 WAYSIDE ROAD, BURLINGTON MA 01803