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Carpenter Technology 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

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

NYSE:CRS' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 8
Current: 6

1
8

During the past 13 years, the highest Piotroski F-Score of Carpenter Technology was 8. The lowest was 1. And the median was 6.


Carpenter Technology 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.

Carpenter Technology Annual Data
Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 5.00 8.00 8.00 6.00

Carpenter Technology Quarterly Data
Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19
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 8.00 7.00 5.00 6.00 6.00

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.


Carpenter Technology Piotroski F-Score Distribution

* The bar in red indicates where Carpenter Technology'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 (Jun19) TTM:Last Year (Jun18) TTM:
Net Income was 31.5 + 35.5 + 51.1 + 48.9 = $167 Mil.
Cash Flow from Operations was 9.4 + 37.8 + 10 + 175.2 = $232 Mil.
Revenue was 572.4 + 556.5 + 609.9 + 641.4 = $2,380 Mil.
Gross Profit was 91.7 + 107 + 123.2 + 122.9 = $445 Mil.
Average Total Assets from the begining of this year (Jun18)
to the end of this year (Jun19) was
(3007 + 3007.7 + 3161.8 + 3240.2 + 3187.8) / 5 = $3120.9 Mil.
Total Assets at the begining of this year (Jun18) was $3,007 Mil.
Long-Term Debt & Capital Lease Obligation was $551 Mil.
Total Current Assets was $1,236 Mil.
Total Current Liabilities was $416 Mil.
Net Income was 23.4 + 92.1 + 30.2 + 42.8 = $189 Mil.

Revenue was 479.8 + 487.8 + 572.2 + 618 = $2,158 Mil.
Gross Profit was 85.7 + 85.7 + 96 + 114.9 = $382 Mil.
Average Net Income from the begining of last year (Jun17)
to the end of last year (Jun18) was
(2878.1 + 2892.5 + 2944.1 + 2991.9 + 3007) / 5 = $2942.72 Mil.
Total Assets at the begining of last year (Jun17) was $2,878 Mil.
Long-Term Debt & Capital Lease Obligation was $546 Mil.
Total Current Assets was $1,179 Mil.
Total Current Liabilities was $363 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.

Carpenter Technology's current Net Income (TTM) was 167. ==> 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.

Carpenter Technology's current Cash Flow from Operations (TTM) was 232. ==> 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(Jun18)
=167/3007
=0.05553708

ROA (Last Year)=Net Income/Total Assets(Jun17)
=188.5/2878.1
=0.0654946

Carpenter Technology's return on assets of this year was 0.05553708. Carpenter Technology's return on assets of last year was 0.0654946. ==> 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.

Carpenter Technology's current Net Income (TTM) was 167. Carpenter Technology's current Cash Flow from Operations (TTM) was 232. ==> 232 > 167 ==> 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: Jun19)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jun18 to Jun19
=550.6/3120.9
=0.17642347

Gearing (Last Year: Jun18)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jun17 to Jun18
=545.7/2942.72
=0.18544068

Carpenter Technology's gearing of this year was 0.17642347. Carpenter Technology's gearing of last year was 0.18544068. ==> 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: Jun19)=Total Current Assets/Total Current Liabilities
=1236.2/416
=2.97163462

Current Ratio (Last Year: Jun18)=Total Current Assets/Total Current Liabilities
=1178.8/363.3
=3.24470135

Carpenter Technology's current ratio of this year was 2.97163462. Carpenter Technology's current ratio of last year was 3.24470135. ==> 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.

Carpenter Technology's number of shares in issue this year was 48.1. Carpenter Technology's number of shares in issue last year was 47.9. ==> 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
=444.8/2380.2
=0.18687505

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=382.3/2157.8
=0.17717119

Carpenter Technology's gross margin of this year was 0.18687505. Carpenter Technology's gross margin of last year was 0.17717119. ==> 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 (Jun18)
=2380.2/3007
=0.79155304

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jun17)
=2157.8/2878.1
=0.74973073

Carpenter Technology's asset turnover of this year was 0.79155304. Carpenter Technology's asset turnover of last year was 0.74973073. ==> 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+0+1+1
=6

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

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

Carpenter Technology  (NYSE:CRS) 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.


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