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GuruFocus has detected 6 Warning Signs with Agilent Technologies Inc $A.
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Agilent Technologies Inc (NYSE:A)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

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

Agilent Technologies Inc has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

A' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 9
Current: 7

1
9

During the past 13 years, the highest Piotroski F-Score of Agilent Technologies Inc was 9. The lowest was 1. And the median was 6.


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 (Oct16) TTM:Last Year (Oct15) TTM:
Net Income was 123 + 91 + 124 + 126 = $464 Mil.
Cash Flow from Operations was 104 + 256 + 199 + 234 = $793 Mil.
Revenue was 1028 + 1019 + 1044 + 1111 = $4,202 Mil.
Gross Profit was 537 + 530 + 542 + 588 = $2,197 Mil.
Average Total Assets from the begining of this year (Oct15)
to the end of this year (Oct16) was
(7479 + 7302 + 7640 + 7734 + 7802) / 5 = $7591.4 Mil.
Total Assets at the begining of this year (Oct15) was $7,479 Mil.
Long-Term Debt was $1,912 Mil.
Total Current Assets was $3,635 Mil.
Total Current Liabilities was $945 Mil.
Net Income was 63 + 87 + 111 + 140 = $401 Mil.

Revenue was 1026 + 963 + 1014 + 1035 = $4,038 Mil.
Gross Profit was 513 + 480 + 513 + 535 = $2,041 Mil.
Average Total Assets from the begining of last year (Oct14)
to the end of last year (Oct15) was
(10815 + 7519 + 7412 + 7251 + 7479) / 5 = $8095.2 Mil.
Total Assets at the begining of last year (Oct14) was $10,815 Mil.
Long-Term Debt was $1,655 Mil.
Total Current Assets was $3,686 Mil.
Total Current Liabilities was $976 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.

Agilent Technologies Inc's current net income (TTM) was 464. ==> 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.

Agilent Technologies Inc's current cash flow from operations (TTM) was 793. ==> 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.

Agilent Technologies Inc's return on assets of this year was 0.06204038. Agilent Technologies Inc's return on assets of last year was 0.03707813. ==> 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.

Agilent Technologies Inc's current net income (TTM) was 464. Agilent Technologies Inc's current cash flow from operations (TTM) was 793. ==> 793 > 464 ==> 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: Oct16)=Long-Term Debt/Average Total Assets from Oct15 to Oct16
=1912/7591.4
=0.25186395

Gearing (Last Year: Oct15)=Long-Term Debt/Average Total Assets from Oct14 to Oct15
=1655/8095.2
=0.20444214

Agilent Technologies Inc's gearing of this year was 0.25186395. Agilent Technologies Inc's gearing of last year was 0.20444214. ==> 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: Oct16)=Total Current Assets/Total Current Liabilities
=3635/945
=3.84656085

Current Ratio (Last Year: Oct15)=Total Current Assets/Total Current Liabilities
=3686/976
=3.77663934

Agilent Technologies Inc's current ratio of this year was 3.84656085. Agilent Technologies Inc's current ratio of last year was 3.77663934. ==> 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.

Agilent Technologies Inc's number of shares in issue this year was 329. Agilent Technologies Inc's number of shares in issue last year was 335. ==> 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.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=2197/4202
=0.52284626

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2041/4038
=0.50544824

Agilent Technologies Inc's gross margin of this year was 0.52284626. Agilent Technologies Inc's gross margin of last year was 0.50544824. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Oct15)
=4202/7479
=0.56183982

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Oct14)
=4038/10815
=0.37337032

Agilent Technologies Inc's asset turnover of this year was 0.56183982. Agilent Technologies Inc's asset turnover of last year was 0.37337032. ==> 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+1+1+0+1+1+1+1
=8

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

Agilent Technologies Inc has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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.

Agilent Technologies Inc Annual Data

Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15Oct16
Question 1 1101111111
Question 2 1111111111
Question 3 0101110001
Question 4 1111111111
Question 5 0101100100
Question 6 0110101111
Question 7 1110011111
Question 8 1101000011
Question 9 0101010101
F-score 5947665768

Agilent Technologies Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Question 1 1111111111
Question 2 1111111111
Question 3 0000011111
Question 4 1111111111
Question 5 1111000000
Question 6 1111100010
Question 7 1111111111
Question 8 0111111111
Question 9 1111011111
F-score 7888677787
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