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Amgen Inc (NAS:AMGN)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

Amgen Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

AMGN' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 6

4
8

During the past 13 years, the highest Piotroski F-Score of Amgen Inc was 8. The lowest was 4. 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 1021 + 1368 + 1258 + 1434 = $5,081 Mil.
Cash Flow from Operations was 1835 + 1807 + 1600 + 1049 = $6,291 Mil.
Revenue was 5011 + 4748 + 4679 + 4238 = $18,676 Mil.
Gross Profit was 3982 + 3960 + 3894 + 3494 = $15,330 Mil.
Total Assets at the begining of this year (Dec12) was $54,298 Mil.
Total Assets was $66,125 Mil.
Long-Term Debt was $29,623 Mil.
Total Current Assets was $27,367 Mil.
Total Current Liabilities was $7,947 Mil.
Net Income was 788 + 1107 + 1266 + 1184 = $4,345 Mil.

Revenue was 4421 + 4319 + 4477 + 4048 = $17,265 Mil.
Gross Profit was 3499 + 3544 + 3725 + 3298 = $14,066 Mil.
Total Assets at the begining of last year (Dec11) was $48,871 Mil.
Total Assets was $54,298 Mil.
Long-Term Debt was $24,034 Mil.
Total Current Assets was $31,209 Mil.
Total Current Liabilities was $8,191 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.

Amgen Inc's current net income was 5,081. ==> 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.

Amgen Inc's current cash flow from operations was 6,291. ==> 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)
=5081/54298
=0.09357619

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=4345/48871
=0.08890753

Amgen Inc's return on assets of this year was 0.09357619. Amgen Inc's return on assets of last year was 0.08890753. ==> This year is higher. ==> Score 1.

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.

Amgen Inc's current net income was 5,081. Amgen Inc's current cash flow from operations was 6,291. ==> 6,291 > 5,081 ==> 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
=29623/66125
=0.44798488

Gearing (Last Year)=Long-Term Debt/Total Assets
=24034/54298
=0.4426314

Amgen Inc's gearing of this year was 0.44798488. Amgen Inc's gearing of last year was 0.4426314. ==> 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
=27367/7947
=3.44368944

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=31209/8191
=3.81015749

Amgen Inc's current ratio of this year was 3.44368944. Amgen Inc's current ratio of last year was 3.81015749. ==> 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.

Amgen Inc's number of shares in issue this year was 768. Amgen Inc's number of shares in issue last year was 781. ==> 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
=15330/18676
=0.82083958

Gross Margin (Last Year)=Gross Profit/Revenue
=14066/17265
=0.81471184

Amgen Inc's gross margin of this year was 0.82083958. Amgen Inc's gross margin of last year was 0.81471184. ==> This year's gross margin is higher. ==> Score 1.

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)
=18676/54298
=0.34395374

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=17265/48871
=0.35327699

Amgen Inc's asset turnover of this year was 0.34395374. Amgen Inc's asset turnover of last year was 0.35327699. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+0+1+1+0
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Amgen Inc has an F-score of 6 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.

Amgen Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 0100110011
Q4 1111111111
Q5 0000101000
Q6 0101110100
Q7 1111111111
Q8 0010110001
Q9 1110000000
F-score 5765875556

Amgen Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 0000111101
Q4 1111111111
Q5 0000000000
Q6 1100001110
Q7 1111111111
Q8 0000000001
Q9 0000100000
F-score 5544656656
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