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GuruFocus has detected 4 Warning Signs with Nokia Oyj $NOK.
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Nokia Oyj (NYSE:NOK)
Piotroski F-Score
2 (As of Today)

Warning Sign:

Piotroski F-Score of 2 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Nokia Oyj has an F-score of 2. It is a bad or low score, which usually implies poor business operation.

NOK' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 9
Current: 2

1
9

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


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 (Mar17) TTM:Last Year (Mar16) TTM:
Net Income was -747.191011236 + -140.291806958 + 667.721518987 + -521.92513369 = $-742 Mil.
Cash Flow from Operations was -692.134831461 + 262.626262626 + 537.974683544 + -505.882352941 = $-397 Mil.
Revenue was 6273.03370787 + 6610.54994388 + 7022.15189873 + 5751.87165775 = $25,658 Mil.
Gross Profit was 2278.65168539 + 2487.09315376 + 2830.16877637 + 2272.72727273 = $9,869 Mil.
Average Total Assets from the begining of this year (Mar16)
to the end of this year (Mar17) was
(51955.4565702 + 51416.8539326 + 48719.4163861 + 0 + 47680.2139037) / 5 = $39954.3881585 Mil.
Total Assets at the begining of this year (Mar16) was $51,955 Mil.
Long-Term Debt was $4,391 Mil.
Total Current Assets was $21,759 Mil.
Total Current Liabilities was $13,598 Mil.
Net Income was 389.450056117 + 170.594837262 + 1949.89106754 + -678.173719376 = $1,832 Mil.

Revenue was 3276.09427609 + 3407.40740741 + 3931.37254902 + 6136.97104677 = $16,752 Mil.
Gross Profit was 1507.29517396 + 1476.99214366 + 1844.22657952 + 1756.1247216 = $6,585 Mil.
Average Total Assets from the begining of last year (Mar15)
to the end of last year (Mar16) was
(23825.7575758 + 23224.4668911 + 23042.6487093 + 0 + 51955.4565702) / 5 = $24409.6659493 Mil.
Total Assets at the begining of last year (Mar15) was $23,826 Mil.
Long-Term Debt was $4,449 Mil.
Total Current Assets was $26,470 Mil.
Total Current Liabilities was $14,147 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.

Nokia Oyj's current net income (TTM) was -742. ==> 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.

Nokia Oyj's current cash flow from operations (TTM) was -397. ==> Negative ==> Score 0.

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 (TTM)/Total Assets at the Beginning of This Year (Mar16)
=-741.686432897/51955.4565702
=-0.01427543

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=1831.76224154/23825.7575758
=0.07688159

Nokia Oyj's return on assets of this year was -0.01427543. Nokia Oyj's return on assets of last year was 0.07688159. ==> 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.

Nokia Oyj's current net income (TTM) was -742. Nokia Oyj's current cash flow from operations (TTM) was -397. ==> -397 > -742 ==> 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: Mar17)=Long-Term Debt/Average Total Assets from Mar16 to Mar17
=4391.44385027/39954.3881585
=0.10991143

Gearing (Last Year: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=4448.77505568/24409.6659493
=0.18225465

Nokia Oyj's gearing of this year was 0.10991143. Nokia Oyj's gearing of last year was 0.18225465. ==> 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: Mar17)=Total Current Assets/Total Current Liabilities
=21759.3582888/13597.8609626
=1.6002045

Current Ratio (Last Year: Mar16)=Total Current Assets/Total Current Liabilities
=26469.9331849/14146.9933185
=1.87106423

Nokia Oyj's current ratio of this year was 1.6002045. Nokia Oyj's current ratio of last year was 1.87106423. ==> 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.

Nokia Oyj's number of shares in issue this year was 5709.2. Nokia Oyj's number of shares in issue last year was 5668.9. ==> 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
=9868.64088825/25657.6072082
=0.38462826

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=6584.63861874/16751.8452793
=0.39306945

Nokia Oyj's gross margin of this year was 0.38462826. Nokia Oyj's gross margin of last year was 0.39306945. ==> 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 (Mar16)
=25657.6072082/51955.4565702
=0.49383855

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=16751.8452793/23825.7575758
=0.70309812

Nokia Oyj's asset turnover of this year was 0.49383855. Nokia Oyj's asset turnover of last year was 0.70309812. ==> 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
=0+0+0+1+1+0+0+0+0
=2

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

Nokia Oyj has an F-score of 2. It is a bad or low score, which usually implies poor business operation.


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.

Nokia Oyj Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 11110001
Question 2 11111111
Question 3 10010011
Question 4 10111110
Question 5 00011001
Question 6 00100101
Question 7 11011000
Question 8 11001101
Question 9 10000011
F-score 74465447

Nokia Oyj Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Question 1 11111110
Question 2 11110000
Question 3 11000000
Question 4 00000001
Question 5 11000011
Question 6 10111000
Question 7 01110000
Question 8 11110000
Question 9 10011110
F-score 76563232
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