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Amazon.com Inc (NAS:AMZN)
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

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

AMZN' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 6

1
8

During the past 13 years, the highest Piotroski F-Score of Amazon.com Inc was 8. The lowest was 1. 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 108 + 240 + -41 + -7 = $300 Mil.
Cash Flow from Operations was -2502 + 5578 + 1388 + 880 = $5,344 Mil.
Revenue was 19741 + 25587 + 17092 + 15704 = $78,124 Mil.
Gross Profit was 5686 + 6781 + 4726 + 4495 = $21,688 Mil.
Total Assets at the begining of this year (Mar13) was $28,377 Mil.
Total Assets was $36,364 Mil.
Long-Term Debt was $3,147 Mil.
Total Current Assets was $19,327 Mil.
Total Current Liabilities was $18,357 Mil.
Net Income was 82 + 98 + -274 + 7 = $-87 Mil.

Revenue was 16070 + 21268 + 13806 + 12834 = $63,978 Mil.
Gross Profit was 4269 + 5131 + 3487 + 3346 = $16,233 Mil.
Total Assets at the begining of last year (Mar12) was $20,339 Mil.
Total Assets was $28,377 Mil.
Long-Term Debt was $3,040 Mil.
Total Current Assets was $16,313 Mil.
Total Current Liabilities was $14,332 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.

Amazon.com Inc's current net income was 300. ==> 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.

Amazon.com Inc's current cash flow from operations was 5,344. ==> 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 (Mar13)
=300/28377
=0.01057194

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=-87/20339
=-0.0042775

Amazon.com Inc's return on assets of this year was 0.01057194. Amazon.com Inc's return on assets of last year was -0.0042775. ==> 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.

Amazon.com Inc's current net income was 300. Amazon.com Inc's current cash flow from operations was 5,344. ==> 5,344 > 300 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year)=Long-Term Debt/Total Assets
=3147/36364
=0.08654163

Gearing (Last Year)=Long-Term Debt/Total Assets
=3040/28377
=0.10712901

Amazon.com Inc's gearing of this year was 0.08654163. Amazon.com Inc's gearing of last year was 0.10712901. ==> This year is lower or equal to last year. ==> Score 1.

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
=19327/18357
=1.05284088

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=16313/14332
=1.13822216

Amazon.com Inc's current ratio of this year was 1.05284088. Amazon.com Inc's current ratio of last year was 1.13822216. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Amazon.com Inc's number of shares in issue this year was 468. Amazon.com Inc's number of shares in issue last year was 463. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=21688/78124
=0.27760995

Gross Margin (Last Year)=Gross Profit/Revenue
=16233/63978
=0.25372784

Amazon.com Inc's gross margin of this year was 0.27760995. Amazon.com Inc's gross margin of last year was 0.25372784. ==> 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 (Mar13)
=78124/28377
=2.75307467

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=63978/20339
=3.14558238

Amazon.com Inc's asset turnover of this year was 2.75307467. Amazon.com Inc's asset turnover of last year was 3.14558238. ==> 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+1+0+0+1+0
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Amazon.com 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.

Amazon.com Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111101
Q2 1111111111
Q3 1001010001
Q4 0111111111
Q5 1111110000
Q6 1001010000
Q7 0011000010
Q8 0100010111
Q9 1011000100
F-score 6568473545

Amazon.com Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111000111
Q2 1111111111
Q3 0000000111
Q4 1111111111
Q5 0111000001
Q6 0000001100
Q7 0011101000
Q8 1111111111
Q9 1000011100
F-score 5456446756
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