Switch to:
Check Point Software Technologies Ltd (NAS:CHKP)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

Check Point Software Technologies Ltd has an F-score of 6 indicating the company's financial situation is typical for a stable company.

CHKP' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 6

2
9

During the past 13 years, the highest Piotroski F-Score of Check Point Software Technologies Ltd was 9. 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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was 161.047 + 185.783 + 160.883 + 162.636 = $670 Mil.
Cash Flow from Operations was 202.461 + 208.883 + 284.587 + 192.726 = $889 Mil.
Revenue was 370.37 + 420.642 + 372.576 + 395.334 = $1,559 Mil.
Gross Profit was 325.641 + 368.719 + 331.246 + 349.731 = $1,375 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(4772.021 + 4766.125 + 4948.818 + 4910.589 + 4884.993) / 5 = $4856.5092 Mil.
Total Assets at the begining of this year (Jun14) was $4,772 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,549 Mil.
Total Current Liabilities was $911 Mil.
Net Income was 159.701 + 194.13 + 153.085 + 159.656 = $667 Mil.

Revenue was 344.127 + 387.075 + 342.206 + 362.598 = $1,436 Mil.
Gross Profit was 303.998 + 340.88 + 303.328 + 321.587 = $1,270 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(4728.088 + 4818.178 + 4886.437 + 4773.289 + 4772.021) / 5 = $4795.6026 Mil.
Total Assets at the begining of last year (Jun13) was $4,728 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,539 Mil.
Total Current Liabilities was $816 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.

Check Point Software Technologies Ltd's current net income (TTM) was 670. ==> 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.

Check Point Software Technologies Ltd's current cash flow from operations (TTM) was 889. ==> 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 (Jun14)
=670.349/4772.021
=0.14047486

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=666.572/4728.088
=0.1409813

Check Point Software Technologies Ltd's return on assets of this year was 0.14047486. Check Point Software Technologies Ltd's return on assets of last year was 0.1409813. ==> Last year is higher ==> Score 0.

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.

Check Point Software Technologies Ltd's current net income (TTM) was 670. Check Point Software Technologies Ltd's current cash flow from operations (TTM) was 889. ==> 889 > 670 ==> CFROA > ROA ==> Score 1.

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: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=0/4856.5092
=0

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=0/4795.6026
=0

Check Point Software Technologies Ltd's gearing of this year was 0. Check Point Software Technologies Ltd's gearing of last year was 0. ==> 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: Jun15)=Total Current Assets/Total Current Liabilities
=1548.668/911.13
=1.69972232

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=1538.86/816.416
=1.88489692

Check Point Software Technologies Ltd's current ratio of this year was 1.69972232. Check Point Software Technologies Ltd's current ratio of last year was 1.88489692. ==> Last year's current ratio is higher ==> Score 0.

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.

Check Point Software Technologies Ltd's number of shares in issue this year was 185.1. Check Point Software Technologies Ltd's number of shares in issue last year was 193.4. ==> 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
=1375.337/1558.922
=0.88223593

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1269.793/1436.006
=0.88425327

Check Point Software Technologies Ltd's gross margin of this year was 0.88223593. Check Point Software Technologies Ltd's gross margin of last year was 0.88425327. ==> Last year's gross margin is higher ==> Score 0.

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 (Jun14)
=1558.922/4772.021
=0.32667962

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=1436.006/4728.088
=0.30371812

Check Point Software Technologies Ltd's asset turnover of this year was 0.32667962. Check Point Software Technologies Ltd's asset turnover of last year was 0.30371812. ==> 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+0+1+1+0+1+0+1
=6

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

Check Point Software Technologies Ltd 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.

Check Point Software Technologies Ltd Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1011111000
Question 4 1111111111
Question 5 1111111111
Question 6 1001001001
Question 7 1111001111
Question 8 1000001110
Question 9 1010110000
F-score 9577668666

Check Point Software Technologies Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1111111111
Question 2 1111111111
Question 3 0000000000
Question 4 1111000111
Question 5 1111111111
Question 6 0000011100
Question 7 1111111111
Question 8 1111111000
Question 9 0000000011
F-score 6666566666
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)

GuruFocus Premium Plus Membership

FEEDBACK