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Apple Inc (NAS:AAPL)
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

Apple Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

AAPL' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Apple Inc was 9. 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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was 8467 + 18024 + 13569 + 10677 = $50,737 Mil.
Cash Flow from Operations was 13250 + 33722 + 19081 + 14988 = $81,041 Mil.
Revenue was 42123 + 74599 + 58010 + 49605 = $224,337 Mil.
Gross Profit was 16009 + 29741 + 23656 + 19681 = $89,087 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(222520 + 231839 + 261894 + 261194 + 273151) / 5 = $250119.6 Mil.
Total Assets at the begining of this year (Jun14) was $222,520 Mil.
Long-Term Debt was $47,419 Mil.
Total Current Assets was $70,953 Mil.
Total Current Liabilities was $65,285 Mil.
Net Income was 7512 + 13072 + 10223 + 7748 = $38,555 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 last year (Jun13)
to the end of last year (Jun14) was
(199856 + 207000 + 225184 + 205989 + 222520) / 5 = $212109.8 Mil.
Total Assets at the begining of last year (Jun13) was $199,856 Mil.
Long-Term Debt was $29,030 Mil.
Total Current Assets was $67,949 Mil.
Total Current Liabilities was $46,205 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.

Apple Inc's current net income (TTM) was 50,737. ==> 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.

Apple Inc's current cash flow from operations (TTM) was 81,041. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Jun14)
=50737/222520
=0.22801097

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=38555/199856
=0.1929139

Apple Inc's return on assets of this year was 0.22801097. Apple Inc's return on assets of last year was 0.1929139. ==> 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.

Apple Inc's current net income (TTM) was 50,737. Apple Inc's current cash flow from operations (TTM) was 81,041. ==> 81,041 > 50,737 ==> 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: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=47419/250119.6
=0.1895853

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=29030/212109.8
=0.13686308

Apple Inc's gearing of this year was 0.1895853. Apple Inc's gearing of last year was 0.13686308. ==> 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: Jun15)=Total Current Assets/Total Current Liabilities
=70953/65285
=1.08681933

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=67949/46205
=1.47059842

Apple Inc's current ratio of this year was 1.08681933. Apple Inc's current ratio of last year was 1.47059842. ==> 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.

Apple Inc's number of shares in issue this year was 5773.1. Apple Inc's number of shares in issue last year was 6051.7. ==> 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
=89087/224337
=0.39711238

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=68399/178144
=0.38395343

Apple Inc's gross margin of this year was 0.39711238. Apple Inc's gross margin of last year was 0.38395343. ==> 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 (Jun14)
=224337/222520
=1.00816556

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=178144/199856
=0.89136178

Apple Inc's asset turnover of this year was 1.00816556. Apple Inc's asset turnover of last year was 0.89136178. ==> 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+0+1+1+1
=7

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

Apple Inc has an F-score of 7. 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 own currency.

Apple Inc Annual Data

Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14
Question 1 1111111111
Question 2 1111111111
Question 3 1111011100
Question 4 1111111111
Question 5 1111111100
Question 6 1011100010
Question 7 0000000011
Question 8 1011101101
Question 9 1001011000
F-score 8578667655

Apple Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1111111111
Question 2 1111111111
Question 3 0000000111
Question 4 1111111111
Question 5 1000000000
Question 6 1110000000
Question 7 0111111111
Question 8 0000011111
Question 9 0000000011
F-score 5554455677
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