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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
Element Solutions has an F-score of 4 indicating the company's financial situation is typical for a stable company.
The historical rank and industry rank for Element Solutions's Piotroski F-Score or its related term are showing as below:
During the past 13 years, the highest Piotroski F-Score of Element Solutions was 9. The lowest was 2. And the median was 5.
The historical data trend for Element Solutions'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.
For the Specialty Chemicals subindustry, Element Solutions'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.
For the Chemicals industry and Basic Materials sector, Element Solutions's Piotroski F-Score distribution charts can be found below:
* The bar in red indicates where Element Solutions'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 42.9 + 29.9 + -31.8 + 77.1 = $118 Mil. Cash Flow from Operations was 53.5 + 83.8 + 87.4 + 108.9 = $334 Mil. Revenue was 574.4 + 586.1 + 599.3 + 573.4 = $2,333 Mil. Gross Profit was 227.8 + 228.5 + 241.9 + 220.3 = $919 Mil. Average Total Assets from the begining of this year (Dec22) to the end of this year (Dec23) was (4903.7 + 4926.5 + 5061 + 4968.8 + 4974.1) / 5 = $4966.82 Mil. Total Assets at the begining of this year (Dec22) was $4,904 Mil. Long-Term Debt & Capital Lease Obligation was $1,921 Mil. Total Current Assets was $1,198 Mil. Total Current Liabilities was $369 Mil. |
Net Income was 56.1 + 65.2 + 53.2 + 12.7 = $187 Mil. Revenue was 680.2 + 676.9 + 618.5 + 573.8 = $2,549 Mil. Gross Profit was 263 + 249.8 + 221.9 + 218 = $953 Mil. Average Total Assets from the begining of last year (Dec21) to the end of last year (Dec22) was (5138.4 + 5128.8 + 5009.7 + 4869.7 + 4903.7) / 5 = $5010.06 Mil. Total Assets at the begining of last year (Dec21) was $5,138 Mil. Long-Term Debt & Capital Lease Obligation was $1,884 Mil. Total Current Assets was $1,189 Mil. Total Current Liabilities was $344 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.
Element Solutions's current Net Income (TTM) was 118.
==> 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.
Element Solutions's current Cash Flow from Operations (TTM) was 334.
==> 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) |
= | 118.1 | / | 4903.7 | |
= | 0.02408386 |
ROA (Last Year) | = | Net Income | / | Total Assets (Dec21) |
= | 187.2 | / | 5138.4 | |
= | 0.03643157 |
Element Solutions's return on assets of this year was 0.02408386. Element Solutions's return on assets of last year was 0.03643157.
==> 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.
Element Solutions's current Net Income (TTM) was 118. Element Solutions's current Cash Flow from Operations (TTM) was 334.
==> 334 > 118 ==> 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 |
= | 1921 | / | 4966.82 | |
= | 0.38676658 |
Gearing (Last Year: Dec22) | = | Long-Term Debt & Capital Lease Obligation | / | Average Total Assets from Dec21 to Dec22 |
= | 1883.8 | / | 5010.06 | |
= | 0.37600348 |
Element Solutions's gearing of this year was 0.38676658. Element Solutions's gearing of last year was 0.37600348.
==> 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 |
= | 1197.5 | / | 369.4 | |
= | 3.24174337 |
Current Ratio (Last Year: Dec22) | = | Total Current Assets | / | Total Current Liabilities |
= | 1188.7 | / | 344.4 | |
= | 3.45150987 |
Element Solutions's current ratio of this year was 3.24174337. Element Solutions's current ratio of last year was 3.45150987.
==> 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.
Element Solutions's number of shares in issue this year was 241.8. Element Solutions's number of shares in issue last year was 241.6.
==> 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 |
= | 918.5 | / | 2333.2 | |
= | 0.39366535 |
Gross Margin (Last Year: TTM) | = | Gross Profit | / | Revenue |
= | 952.7 | / | 2549.4 | |
= | 0.37369577 |
Element Solutions's gross margin of this year was 0.39366535. Element Solutions's gross margin of last year was 0.37369577.
==> 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) |
= | 2333.2 | / | 4903.7 | |
= | 0.47580398 |
Asset Turnover (Last Year) | = | Revenue | / | Total Assets at the Beginning of Last Year (Dec21) |
= | 2549.4 | / | 5138.4 | |
= | 0.49614666 |
Element Solutions's asset turnover of this year was 0.47580398. Element Solutions's asset turnover of last year was 0.49614666.
==> 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 | + | 1 | + | 0 | + | 0 | + | 0 | + | 1 | + | 0 | |
= | 4 |
Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
Element Solutions has an F-score of 4 indicating the company's financial situation is typical for a stable company.
Element Solutions (NYSE:ESI) 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.
Thank you for viewing the detailed overview of Element Solutions's Piotroski F-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Nichelle Maynard-elliott | director | PLATFORM SPECIALTY PRODUCTS CORPORATION, 383 MAIN AVENUE, NORWALK CT 06851 |
Michael Goralski | officer: See Remarks | 383 MAIN AVENUE, 6TH FLOOR, NORWALK CT 06851 |
Benjamin Gliklich | officer: VP Corporate Dev, Finance & IR | 245 FREIGHT STREET, WATERBURY CT 06702 |
Carey J. Dorman | officer: Chief Financial Officer | C/O ELEMENT SOLUTIONS INC, 383 MAIN AVENUE, 6TH FLOOR, NORWALK CT 06851 |
Martin E Franklin | director | C/O MARIPOSA CAPITAL, LLC, 5200 BLUE LAGOON DRIVE, SUITE 855, MIAMI FL 33126 |
Elyse Napoli Filon | director | 383 MAIN AVENUE, 6TH FLOOR, NORWALK CT 06851 |
Scot Benson | officer: President - Perf. Solutions | 245 FREIGHT STREET, WATERBURY CT 06702 |
Joseph J. D'ambrisi | officer: SVP and Head of Electronics | 383 MAIN AVENUE, 6TH FLOOR, NORWALK CT 06851 |
Patricia Mount | officer: VP, Program Mgt & Integration | JARDEN CORPORATION, 555 THEODORE FREMD AVENUE, RYE NY 10580 |
Christopher T. Fraser | director | 9555 WEST SAM HOUSTON PARKWAY SOUTH, SUITE 600, HOUSTON TX 77099 |
Ashken Ian G H | director | C/O MARIPOSA CAPITAL, LLC, 5200 BLUE LAGOON DRIVE, SUITE 855, MIAMI FL 33126 |
John Edward Capps | officer: EVP, General Counsel & Sec. | 2381 EXECUTIVE CENTER DRIVE, BOCA RATON FL 33431 |
Rakesh Sachdev | officer: Chief Executive Officer | 3050 SPRUCE STREET, ST LOUIS MO 63103 |
Pershing Square Capital Management, L.p. | director, 10 percent owner | 787 11TH AVENUE, 9TH FLOOR, NEW YORK NY 10019 |
John David Tolbert | officer: Chief Human Resources Officer | 345 S HIGH STREET, STE 201, MUNCIE IN 47305 |
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