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Apple Inc (NAS:AAPL)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Apple Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

AAPL' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 5

3
8

During the past 13 years, the highest Piotroski F-Score of Apple Inc was 8. The lowest was 3. 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 own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 7512 + 13072 + 10223 + 7748 = $38,555 Mil.
Cash Flow from Operations was 9908 + 22670 + 13538 + 10255 = $56,371 Mil.
Revenue was 37472 + 57594 + 45646 + 37432 = $178,144 Mil.
Gross Profit was 13871 + 21846 + 17947 + 14735 = $68,399 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(199856 + 207000 + 225184 + 205989 + 222520) / 5 = $212,110 Mil.
Total Assets was $222,520 Mil.
Long-Term Debt was $29,030 Mil.
Total Current Assets was $67,949 Mil.
Total Current Liabilities was $46,205 Mil.
Net Income was 8223 + 13078 + 9547 + 6900 = $37,748 Mil.

Revenue was 35966 + 54512 + 43603 + 35323 = $169,404 Mil.
Gross Profit was 14401 + 21060 + 16349 + 13024 = $64,834 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(162896 + 176064 + 196088 + 194743 + 199856) / 5 = $185,929 Mil.
Total Assets was $199,856 Mil.
Long-Term Debt was $16,958 Mil.
Total Current Assets was $68,219 Mil.
Total Current Liabilities was $36,319 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Apple Inc's current net income (ttm) was 38,555. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Apple Inc's current cash flow from operations (ttm) was 56,371. ==> Positive ==> Score 1.

Q3. 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)/Average Total Assets from Jun13 to Jun14
=38555/212109.8
=0.18176906

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jun12 to Jun13
=37748/185929.4
=0.2030233

Apple Inc's return on assets of this year was 0.18176906. Apple Inc's return on assets of last year was 0.2030233. ==> Last year is higher ==> Score 0.

Q4. 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.

Apple Inc's current net income (ttm) was 38,555. Apple Inc's current cash flow from operations (ttm) was 56,371. ==> 56,371 > 38,555 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun14)=Long-Term Debt/Total Assets
=29030/222520
=0.13046018

Gearing (Last Year: Jun13)=Long-Term Debt/Total Assets
=16958/199856
=0.08485109

Apple Inc's gearing of this year was 0.13046018. Apple Inc's gearing of last year was 0.08485109. ==> Last year is lower than this year ==> Score 0.

Q6. 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: Jun14)=Total Current Assets/Total Current Liabilities
=67949/46205
=1.47059842

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=68219/36319
=1.87832815

Apple Inc's current ratio of this year was 1.47059842. Apple Inc's current ratio of last year was 1.87832815. ==> Last year's current ratio is higher ==> Score 0.

Q7. 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.

Apple Inc's number of shares in issue this year was 6051.7. Apple Inc's number of shares in issue last year was 6469.9. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Q8. 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
=68399/178144
=0.38395343

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=64834/169404
=0.38271824

Apple Inc's gross margin of this year was 0.38395343. Apple Inc's gross margin of last year was 0.38271824. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout 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)/Average Total Assets from Jun13 to Jun14
=178144/212109.8
=0.8398669

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jun12 to Jun13
=169404/185929.4
=0.91112003

Apple Inc's asset turnover of this year was 0.8398669. Apple Inc's asset turnover of last year was 0.91112003. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+0+1+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Apple Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.


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, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Apple Inc Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Q1 1111111111
Q2 1111111111
Q3 1111111110
Q4 1111111111
Q5 1111111110
Q6 1101110001
Q7 0000000001
Q8 0101110110
Q9 1111111111
F-score 7868886776

Apple Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1110000000
Q4 1111111111
Q5 1111100000
Q6 0000111000
Q7 0000011111
Q8 1110000001
Q9 1000000000
F-score 7664555445
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