Switch to:

Northern Trust Piotroski F-Score

: 6 (As of Today)
View and export this data going back to 1990. Start your Free Trial

The zones of discrimination were as such:

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

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

NAS:NTRS' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Med: 6   Max: 8
Current: 6

2
8

During the past 13 years, the highest Piotroski F-Score of Northern Trust was 8. The lowest was 2. And the median was 6.

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 (Sep20) TTM:Last Year (Sep19) TTM:
Net Income was 371.1 + 360.6 + 313.3 + 294.5 = $1,340 Mil.
Cash Flow from Operations was 1636.4 + -2685.3 + 3183.7 + -77.9 = $2,057 Mil.
Revenue was 1342 + 1394.9 + 1329.9 + 1299.1 = $5,366 Mil.
Average Total Assets from the begining of this year (Sep19)
to the end of this year (Sep20) was
(124355.8 + 136828.4 + 161709.2 + 151432.9 + 152082) / 5 = $145281.66 Mil.
Total Assets at the begining of this year (Sep19) was $124,356 Mil.
Long-Term Debt & Capital Lease Obligation was $10,901 Mil.
Total Assets was $152,082 Mil.
Total Liabilities was $140,503 Mil.
Net Income was 409.9 + 347.1 + 389.4 + 384.6 = $1,531 Mil.

Revenue was 1308.3 + 1292.5 + 1320.2 + 1343.9 = $5,265 Mil.
Average Total Assets from the begining of last year (Sep18)
to the end of last year (Sep19) was
(132378.5 + 132212.5 + 121869.4 + 126550.9 + 124355.8) / 5 = $127473.42 Mil.
Total Assets at the begining of last year (Sep18) was $132,379 Mil.
Long-Term Debt & Capital Lease Obligation was $11,835 Mil.
Total Assets was $124,356 Mil.
Total Liabilities was $113,545 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.

Northern Trust's current Net Income (TTM) was 1,340. ==> 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.

Northern Trust's current Cash Flow from Operations (TTM) was 2,057. ==> 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 (Sep19)
=1339.5/124355.8
=0.01077151

ROA (Last Year)=Net Income/Total Assets (Sep18)
=1531/132378.5
=0.01156532

Northern Trust's return on assets of this year was 0.01077151. Northern Trust's return on assets of last year was 0.01156532. ==> 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.

Northern Trust's current Net Income (TTM) was 1,340. Northern Trust's current Cash Flow from Operations (TTM) was 2,057. ==> 2,057 > 1,340 ==> 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: Sep20)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Sep19 to Sep20
=10901/145281.66
=0.07503356

Gearing (Last Year: Sep19)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Sep18 to Sep19
=11834.5/127473.42
=0.09283896

Northern Trust's gearing of this year was 0.07503356. Northern Trust's gearing of last year was 0.09283896. ==> 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

* Note that for banks and insurance companies, there's no Total Current Assets and Total Current Liabilities reported. Thus, we use Total Assets and Total Liabilities to calculate current ratio for banks and insurance companies.

Current Ratio (This Year: Sep20)=Total Assets/Total Liabilities
=152082/140502.9
=1.08241182

Current Ratio (Last Year: Sep19)=Total Assets/Total Liabilities
=124355.8/113544.5
=1.09521641

Northern Trust's current ratio of this year was 1.08241182. Northern Trust's current ratio of last year was 1.09521641. ==> 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.

Northern Trust's number of shares in issue this year was 208.688. Northern Trust's number of shares in issue last year was 214.207. ==> 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.

* Note that for banks and insurance companies, there's no Gross Profit reported. Thus, we use net income instead of gross profit and calculate Net Margin for this score.

Net Margin (This Year: TTM)=Net Income/Revenue
=1339.5/5365.9
=0.24963193

Net Margin (Last Year: TTM)=Net Income/Revenue
=1531/5264.9
=0.29079375

Northern Trust's net margin of this year was 0.24963193. Northern Trust's net margin of last year was 0.29079375. ==> Last year's net 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 (Sep19)
=5365.9/124355.8
=0.04314958

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Sep18)
=5264.9/132378.5
=0.03977156

Northern Trust's asset turnover of this year was 0.04314958. Northern Trust's asset turnover of last year was 0.03977156. ==> 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+0+1+1+0+1+0+1
=6

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

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

Northern Trust  (NAS:NTRS) 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.


Northern Trust Piotroski F-Score Related Terms

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)