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Altera Corp (NAS:ALTR)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

Altera Corp has an F-score of 4 indicating the company's financial situation is typical for a stable company.

ALTR' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 4

2
8

During the past 13 years, the highest Piotroski F-Score of Altera Corp was 8. The lowest was 2. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 98.934 + 119.432 + 101.509 + 120.189 = $440 Mil.
Cash Flow from Operations was 130.759 + 245.406 + 64.565 + 149.478 = $590 Mil.
Revenue was 454.367 + 445.945 + 421.759 + 410.501 = $1,733 Mil.
Gross Profit was 310.343 + 304.42 + 286.655 + 284.418 = $1,186 Mil.
Total Assets at the begining of this year (Dec12) was $4,658 Mil.
Total Assets was $6,010 Mil.
Long-Term Debt was $1,491 Mil.
Total Current Assets was $3,853 Mil.
Total Current Liabilities was $707 Mil.
Net Income was 120.805 + 157.489 + 162.679 + 115.834 = $557 Mil.

Revenue was 439.44 + 495.01 + 464.831 + 383.754 = $1,783 Mil.
Gross Profit was 306.073 + 343.003 + 323.516 + 268.92 = $1,242 Mil.
Total Assets at the begining of last year (Dec11) was $4,282 Mil.
Total Assets was $4,658 Mil.
Long-Term Debt was $500 Mil.
Total Current Assets was $3,680 Mil.
Total Current Liabilities was $543 Mil.

Profitability

Q1. 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.

Altera Corp's current net income was 440. ==> Positive ==> Score 1.

Q2. 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.

Altera Corp's current cash flow from operations was 590. ==> 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/Total Assets at the beginning of this year (Dec12)
=440.064/4657.828
=0.09447837

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=556.807/4282.268
=0.13002619

Altera Corp's return on assets of this year was 0.09447837. Altera Corp's return on assets of last year was 0.13002619. ==> 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.

Altera Corp's current net income was 440. Altera Corp's current cash flow from operations was 590. ==> 590 > 440 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

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

Score 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=1491.466/6009.847
=0.24817038

Gearing (Last Year)=Long-Term Debt/Total Assets
=500/4657.828
=0.10734617

Altera Corp's gearing of this year was 0.24817038. Altera Corp's gearing of last year was 0.10734617. ==> Last year is lower ==> 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)=Total Current Assets/Total Current Liabilities
=3852.84/707.386
=5.44658786

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=3680.352/543.077
=6.77685116

Altera Corp's current ratio of this year was 5.44658786. Altera Corp's current ratio of last year was 6.77685116. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Altera Corp's number of shares in issue this year was 322. Altera Corp's number of shares in issue last year was 322.2. ==> There is the same number of shares in issue this year, or fewer. ==> 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)=Gross Profit/Revenue
=1185.836/1732.572
=0.68443678

Gross Margin (Last Year)=Gross Profit/Revenue
=1241.512/1783.035
=0.69629144

Altera Corp's gross margin of this year was 0.68443678. Altera Corp's gross margin of last year was 0.69629144. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Dec12)
=1732.572/4657.828
=0.37196994

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=1783.035/4282.268
=0.41637632

Altera Corp's asset turnover of this year was 0.37196994. Altera Corp's asset turnover of last year was 0.41637632. ==> 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+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

Altera Corp has an F-score of 4 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


Historical Data

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

Altera Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1010101000
Q4 1110111111
Q5 0010011100
Q6 1011101010
Q7 1111110011
Q8 1000101000
Q9 1010101000
F-score 8484858454

Altera Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 0000000000
Q4 1111111111
Q5 1111000110
Q6 0000111000
Q7 0011111111
Q8 1000000000
Q9 0000000000
F-score 5455555554
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