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CVS Caremark Corp (NYSE:CVS)
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

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

CVS' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 6

3
8

During the past 13 years, the highest Piotroski F-Score of CVS Caremark Corp was 8. 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 1246 + 1129 + 1261 + 1254 = $4,890 Mil.
Cash Flow from Operations was 897 + 2172 + 1538 + 1703 = $6,310 Mil.
Revenue was 34602 + 32689 + 32782 + 31968 = $132,041 Mil.
Gross Profit was 6324 + 5942 + 6331 + 6035 = $24,632 Mil.
Total Assets at the begining of this year (Jun13) was $66,284 Mil.
Total Assets was $72,593 Mil.
Long-Term Debt was $12,252 Mil.
Total Current Assets was $24,138 Mil.
Total Current Liabilities was $16,629 Mil.
Net Income was 1124 + 954 + 1129 + 1006 = $4,213 Mil.

Revenue was 31248 + 30751 + 31394 + 30227 = $123,620 Mil.
Gross Profit was 5841 + 5577 + 6297 + 5647 = $23,362 Mil.
Total Assets at the begining of last year (Jun12) was $65,589 Mil.
Total Assets was $66,284 Mil.
Long-Term Debt was $9,358 Mil.
Total Current Assets was $19,869 Mil.
Total Current Liabilities was $12,690 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.

CVS Caremark Corp's current net income was 4,890. ==> 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.

CVS Caremark Corp's current cash flow from operations was 6,310. ==> 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 (Jun13)
=4890/66284
=0.07377346

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=4213/65589
=0.06423333

CVS Caremark Corp's return on assets of this year was 0.07377346. CVS Caremark Corp's return on assets of last year was 0.06423333. ==> 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.

CVS Caremark Corp's current net income was 4,890. CVS Caremark Corp's current cash flow from operations was 6,310. ==> 6,310 > 4,890 ==> 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
=12252/72593
=0.1687766

Gearing (Last Year)=Long-Term Debt/Total Assets
=9358/66284
=0.14118038

CVS Caremark Corp's gearing of this year was 0.1687766. CVS Caremark Corp's gearing of last year was 0.14118038. ==> 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)=Total Current Assets/Total Current Liabilities
=24138/16629
=1.45156053

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=19869/12690
=1.56572104

CVS Caremark Corp's current ratio of this year was 1.45156053. CVS Caremark Corp's current ratio of last year was 1.56572104. ==> 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.

CVS Caremark Corp's number of shares in issue this year was 1174. CVS Caremark Corp's number of shares in issue last year was 1236. ==> 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)=Gross Profit/Revenue
=24632/132041
=0.18654812

Gross Margin (Last Year)=Gross Profit/Revenue
=23362/123620
=0.18898237

CVS Caremark Corp's gross margin of this year was 0.18654812. CVS Caremark Corp's gross margin of last year was 0.18898237. ==> Last year's gross margin is higher ==> Score 0.

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 (Jun13)
=132041/66284
=1.99204936

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=123620/65589
=1.88476726

CVS Caremark Corp's asset turnover of this year was 1.99204936. CVS Caremark Corp's asset turnover of last year was 1.88476726. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

CVS Caremark 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


Historical Data

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

CVS Caremark Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 0011010111
Q4 0111111111
Q5 0100101010
Q6 0100011001
Q7 0000011111
Q8 1110001001
Q9 1011010111
F-score 4665477678

CVS Caremark Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1111111111
Q4 1111111111
Q5 0111001000
Q6 0000110110
Q7 1111111111
Q8 0000111110
Q9 1111111111
F-score 6777888886
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