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Alexion Pharmaceuticals Inc (NAS:ALXN)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, 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

Alexion Pharmaceuticals Inc has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

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

2
8

During the past 13 years, the highest Piotroski F-Score of Alexion Pharmaceuticals Inc was 8. The lowest was 2. And the median was 4.


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 (Dec14) TTM:Last Year (Dec13) TTM:
Net Income was 159.354 + 166.495 + 177.731 + 153.332 = $657 Mil.
Cash Flow from Operations was -31.055 + 106.15 + 281.521 + 283.459 = $640 Mil.
Revenue was 566.616 + 512.495 + 555.146 + 599.476 = $2,234 Mil.
Gross Profit was 533.677 + 472.869 + 503.288 + 550.037 = $2,060 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(3317.696 + 3379.666 + 3553.81 + 3890.887 + 4201.962) / 5 = $3668.8042 Mil.
Total Assets at the begining of this year (Dec13) was $3,318 Mil.
Long-Term Debt was $117 Mil.
Total Current Assets was $2,796 Mil.
Total Current Liabilities was $607 Mil.
Net Income was 82.217 + 95.885 + 93.785 + -18.992 = $253 Mil.

Revenue was 338.941 + 370.091 + 400.405 + 441.909 = $1,551 Mil.
Gross Profit was 303.672 + 330.714 + 349.047 + 390.357 = $1,374 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(2613.56 + 2685.881 + 2815.238 + 3049.795 + 3317.696) / 5 = $2896.434 Mil.
Total Assets at the begining of last year (Dec12) was $2,614 Mil.
Long-Term Debt was $97 Mil.
Total Current Assets was $2,187 Mil.
Total Current Liabilities was $582 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.

Alexion Pharmaceuticals Inc's current net income (TTM) was 657. ==> 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.

Alexion Pharmaceuticals Inc's current cash flow from operations (TTM) was 640. ==> 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 (Dec13)
=656.912/3317.696
=0.19800247

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=252.895/2613.56
=0.09676265

Alexion Pharmaceuticals Inc's return on assets of this year was 0.19800247. Alexion Pharmaceuticals Inc's return on assets of last year was 0.09676265. ==> 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.

Alexion Pharmaceuticals Inc's current net income (TTM) was 657. Alexion Pharmaceuticals Inc's current cash flow from operations (TTM) was 640. ==> 640 <= 657 ==> CFROA <= ROA ==> Score 0.

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: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=116.599/3668.8042
=0.0317812

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=97.23/2896.434
=0.03356886

Alexion Pharmaceuticals Inc's gearing of this year was 0.0317812. Alexion Pharmaceuticals Inc's gearing of last year was 0.03356886. ==> 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: Dec14)=Total Current Assets/Total Current Liabilities
=2796.029/606.74
=4.60828197

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=2186.857/582.429
=3.7547186

Alexion Pharmaceuticals Inc's current ratio of this year was 4.60828197. Alexion Pharmaceuticals Inc's current ratio of last year was 3.7547186. ==> 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.

Alexion Pharmaceuticals Inc's number of shares in issue this year was 201.9. Alexion Pharmaceuticals Inc's number of shares in issue last year was 202.9. ==> 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
=2059.871/2233.733
=0.92216527

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1373.79/1551.346
=0.88554713

Alexion Pharmaceuticals Inc's gross margin of this year was 0.92216527. Alexion Pharmaceuticals Inc's gross margin of last year was 0.88554713. ==> 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 (Dec13)
=2233.733/3317.696
=0.67327838

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=1551.346/2613.56
=0.59357581

Alexion Pharmaceuticals Inc's asset turnover of this year was 0.67327838. Alexion Pharmaceuticals Inc's asset turnover of last year was 0.59357581. ==> 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+0+1+1+1+1+1
=8

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

Alexion Pharmaceuticals Inc has an F-score of 8. 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.

Alexion Pharmaceuticals Inc Annual Data

Jul05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 0001111111
Question 2 0001111111
Question 3 0011101101
Question 4 1101011110
Question 5 0011111011
Question 6 0100110101
Question 7 0000000000
Question 8 0000001101
Question 9 0111101101
F-score 1336657747

Alexion Pharmaceuticals Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 1111111111
Question 3 1000000111
Question 4 1111111101
Question 5 0111111110
Question 6 1111011110
Question 7 0001000010
Question 8 1110000111
Question 9 1000011111
F-score 7666466880
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