Switch to:
Avery Dennison Corp (NYSE:AVY)
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

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

AVY' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of Avery Dennison Corp was 9. The lowest was 3. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 46.5 + 42.7 + 71.2 + 42.5 = $203 Mil.
Cash Flow from Operations was 49 + 224.4 + -108 + 117.8 = $283 Mil.
Revenue was 1504.9 + 1583.9 + 1550.1 + 1615.8 = $6,255 Mil.
Gross Profit was 402.2 + 416.3 + 407.2 + 428.2 = $1,654 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(5191 + 4732.8 + 4610.6 + 4591.3 + 4616.6) / 5 = $4,748 Mil.
Total Assets was $4,617 Mil.
Long-Term Debt was $945 Mil.
Total Current Assets was $2,130 Mil.
Total Current Liabilities was $1,623 Mil.
Net Income was 58.3 + 49 + 57.8 + 68.8 = $234 Mil.

Revenue was 1447 + 1483.1 + 1498.9 + 1552.3 = $5,981 Mil.
Gross Profit was 381 + 382 + 401.7 + 417.5 = $1,582 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(5057.9 + 5102.4 + 5105.3 + 5137.6 + 5191) / 5 = $5,119 Mil.
Total Assets was $5,191 Mil.
Long-Term Debt was $951 Mil.
Total Current Assets was $2,589 Mil.
Total Current Liabilities was $1,985 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Avery Dennison Corp's current net income (ttm) was 203. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Avery Dennison Corp's current cash flow from operations (ttm) was 283. ==> 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 (TTM)/Average Total Assets from Jun13 to Jun14
=202.9/4748.46
=0.04272964

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jun12 to Jun13
=233.9/5118.84
=0.04569395

Avery Dennison Corp's return on assets of this year was 0.04272964. Avery Dennison Corp's return on assets of last year was 0.04569395. ==> 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.

Avery Dennison Corp's current net income (ttm) was 203. Avery Dennison Corp's current cash flow from operations (ttm) was 283. ==> 283 > 203 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

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

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun14)=Long-Term Debt/Total Assets
=945.2/4616.6
=0.20473942

Gearing (Last Year: Jun13)=Long-Term Debt/Total Assets
=951.4/5191
=0.18327875

Avery Dennison Corp's gearing of this year was 0.20473942. Avery Dennison Corp's gearing of last year was 0.18327875. ==> Last year is lower than this year ==> 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: Jun14)=Total Current Assets/Total Current Liabilities
=2129.9/1622.7
=1.31256548

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=2589/1984.9
=1.30434783

Avery Dennison Corp's current ratio of this year was 1.31256548. Avery Dennison Corp's current ratio of last year was 1.30434783. ==> This year's current ratio is higher. ==> Score 1.

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.

Avery Dennison Corp's number of shares in issue this year was 96.7. Avery Dennison Corp's number of shares in issue last year was 100.8. ==> There is smaller number of shares in issue this year, or the same. ==> 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: TTM)=Gross Profit/Revenue
=1653.9/6254.7
=0.26442515

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1582.2/5981.3
=0.26452443

Avery Dennison Corp's gross margin of this year was 0.26442515. Avery Dennison Corp's gross margin of last year was 0.26452443. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout 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)/Average Total Assets from Jun13 to Jun14
=6254.7/4748.46
=1.317206

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jun12 to Jun13
=5981.3/5118.84
=1.16848739

Avery Dennison Corp's asset turnover of this year was 1.317206. Avery Dennison Corp's asset turnover of last year was 1.16848739. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Avery Dennison Corp 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, Altman Z-Score, Beneish M-Score


Historical Data

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

Avery Dennison Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111101111
Q2 1111111111
Q3 1010001010
Q4 1111111111
Q5 0110011010
Q6 1000101101
Q7 0111100111
Q8 0010010011
Q9 1111100101
F-score 6685646677

Avery Dennison Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 0001111110
Q4 1111111111
Q5 1111100000
Q6 1000111111
Q7 1111111111
Q8 0111111110
Q9 1110111111
F-score 6677988776
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK