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Adobe Systems Inc (NAS:ADBE)
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

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

ADBE' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Adobe Systems Inc was 9. The lowest was 3. And the median was 7.


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 (Feb16) TTM:Last Year (Feb15) TTM:
Net Income was 147.493 + 174.465 + 222.705 + 254.307 = $799 Mil.
Cash Flow from Operations was 471.484 + 360.488 + 454.515 + 497.527 = $1,784 Mil.
Revenue was 1162.158 + 1217.768 + 1306.404 + 1383.335 = $5,070 Mil.
Gross Profit was 976.985 + 1026.783 + 1105.043 + 1184.763 = $4,294 Mil.
Average Total Assets from the begining of this year (Feb15)
to the end of this year (Feb16) was
(11008.422 + 11165.383 + 11508.395 + 11726.472 + 11896.682) / 5 = $11461.0708 Mil.
Total Assets at the begining of this year (Feb15) was $11,008 Mil.
Long-Term Debt was $1,917 Mil.
Total Current Assets was $4,935 Mil.
Total Current Liabilities was $2,232 Mil.
Net Income was 88.527 + 44.686 + 88.136 + 84.888 = $306 Mil.

Revenue was 1068.208 + 1005.409 + 1073.328 + 1109.181 = $4,256 Mil.
Gross Profit was 913.304 + 847.685 + 912.385 + 942.383 = $3,616 Mil.
Average Total Assets from the begining of last year (Feb14)
to the end of last year (Feb15) was
(10245.882 + 10372.199 + 10493.68 + 10785.829 + 11008.422) / 5 = $10581.2024 Mil.
Total Assets at the begining of last year (Feb14) was $10,246 Mil.
Long-Term Debt was $1,902 Mil.
Total Current Assets was $3,972 Mil.
Total Current Liabilities was $1,788 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.

Adobe Systems Inc's current net income (TTM) was 799. ==> 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.

Adobe Systems Inc's current cash flow from operations (TTM) was 1,784. ==> 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 (Feb15)
=798.97/11008.422
=0.07257807

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Feb14)
=306.237/10245.882
=0.02988879

Adobe Systems Inc's return on assets of this year was 0.07257807. Adobe Systems Inc's return on assets of last year was 0.02988879. ==> 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.

Adobe Systems Inc's current net income (TTM) was 799. Adobe Systems Inc's current cash flow from operations (TTM) was 1,784. ==> 1,784 > 799 ==> 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: Feb16)=Long-Term Debt/Average Total Assets from Feb15 to Feb16
=1916.831/11461.0708
=0.16724711

Gearing (Last Year: Feb15)=Long-Term Debt/Average Total Assets from Feb14 to Feb15
=1901.554/10581.2024
=0.17971058

Adobe Systems Inc's gearing of this year was 0.16724711. Adobe Systems Inc's gearing of last year was 0.17971058. ==> 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: Feb16)=Total Current Assets/Total Current Liabilities
=4935.39/2231.806
=2.21138845

Current Ratio (Last Year: Feb15)=Total Current Assets/Total Current Liabilities
=3972.159/1788.16
=2.22136666

Adobe Systems Inc's current ratio of this year was 2.21138845. Adobe Systems Inc's current ratio of last year was 2.22136666. ==> 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.

Adobe Systems Inc's number of shares in issue this year was 505.7. Adobe Systems Inc's number of shares in issue last year was 507.5. ==> 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
=4293.574/5069.665
=0.84691474

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3615.757/4256.126
=0.84954181

Adobe Systems Inc's gross margin of this year was 0.84691474. Adobe Systems Inc's gross margin of last year was 0.84954181. ==> Last year's gross margin is higher ==> Score 0.

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 (Feb15)
=5069.665/11008.422
=0.46052604

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Feb14)
=4256.126/10245.882
=0.41539869

Adobe Systems Inc's asset turnover of this year was 0.46052604. Adobe Systems Inc's asset turnover of last year was 0.41539869. ==> 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+1+0+1+0+1
=7

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

Adobe Systems 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.

Adobe Systems Inc Annual Data

Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14Nov15
Question 1 1111111111
Question 2 1111111111
Question 3 0010100001
Question 4 1111111111
Question 5 1100011110
Question 6 1010111001
Question 7 0111111011
Question 8 0111010000
Question 9 1010100001
F-score 6685776457

Adobe Systems Inc Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
Question 1 1111111111
Question 2 1111111111
Question 3 0000011111
Question 4 1111111111
Question 5 1111100001
Question 6 0000011110
Question 7 0011111111
Question 8 0000000000
Question 9 0000011111
F-score 4455577777
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