Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
Aetna has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.
The historical rank and industry rank for Aetna's Piotroski F-Score or its related term are showing as below:
Aetna Piotroski F-Score Historical Data
The historical data trend for Aetna'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 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.
Net Income was 139 + -381 + 1203 + 838 = $1,799 Mil.
Revenue was 15728 + 15165 + 15523 + 14994 = $61,410 Mil.
Average Total Assets from the begining of last year (Sep16)
to the end of last year (Sep17) was
(71882.6 + 69146 + 56351 + 56714 + 57383) / 5 = $62295.32 Mil. Total Assets at the begining of last year (Sep16) was $71,883 Mil. Long-Term Debt & Capital Lease Obligation was $8,161 Mil. Total Assets was $57,383 Mil. Total Liabilities was $41,565 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.
Aetna's current Net Income (TTM) was 3,665.
==> 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.
Aetna's gearing of this year was 0.13550409. Aetna's gearing of last year was 0.13100503.
==> 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
* Note that for banks and insurance companies, there's no Total Current Assets and Total Current Liabilities reported. Thus, we use Total Assets and Total Liabilities to calculate current ratio for banks and insurance companies.
Aetna's current ratio of this year was 1.48165542. Aetna's current ratio of last year was 1.38056057.
==> 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.
Aetna's number of shares in issue this year was 330.2. Aetna's number of shares in issue last year was 332.
==> 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.
* Note that for banks and insurance companies, there's no Gross Profit reported. Thus, we use net income instead of gross profit and calculate Net Margin for this score.
Aetna's net margin of this year was 0.05985335. Aetna's net margin of last year was 0.0292949.
==> This year's net 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
Aetna's asset turnover of this year was 1.06709304. Aetna's asset turnover of last year was 0.85430967.
==> This year's asset turnover is higher. ==> Score 1.
Evaluation
Piotroski F-Score
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Que. 1
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Que. 2
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Que. 4
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Que. 7
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1
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1
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0
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7
Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
Aetna has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.
Aetna (NYSE:AET) 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.
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.
Aetna Piotroski F-Score Related Terms
Thank you for viewing the detailed overview of Aetna's Piotroski F-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
Aetna is one of the largest managed-care organizations in the U.S., with over 22 million medical members. This large member count helps the firm diversify its operating risk and has formed the basis for material competitive advantages. The firm provides health insurance services to its members through products that encompass every major insurance market--individual, group, and government sponsored. Aetna and CVS recently announced their intention to merge operations, and if approved, it would form one of the most powerful players within the healthcare space.
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