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Dean Foods Co (NYSE:DF)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

The zones of discrimination were as such:

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

Dean Foods Co has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

DF' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 8

2
8

During the past 13 years, the highest Piotroski F-Score of Dean Foods Co was 8. 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 local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Net Income was 18.48 + 39.201 + 33.371 + 14.526 = $106 Mil.
Cash Flow from Operations was 86.125 + 46.23 + 79.089 + 59.299 = $271 Mil.
Revenue was 2022.5 + 1878.828 + 1848.788 + 1964.601 = $7,715 Mil.
Gross Profit was 508.471 + 504.068 + 493.253 + 488.775 = $1,995 Mil.
Average Total Assets from the begining of this year (Sep15)
to the end of this year (Sep16) was
(2496.811 + 2520.163 + 2452.354 + 2537.346 + 2567.652) / 5 = $2514.8652 Mil.
Total Assets at the begining of this year (Sep15) was $2,497 Mil.
Long-Term Debt was $895 Mil.
Total Current Assets was $1,020 Mil.
Total Current Liabilities was $682 Mil.
Net Income was 5.277 + -73.74 + 26.519 + 20.233 = $-22 Mil.

Revenue was 2395.007 + 2050.762 + 2014.706 + 2033.693 = $8,494 Mil.
Gross Profit was 441.4 + 478.309 + 495.641 + 491.988 = $1,907 Mil.
Average Total Assets from the begining of last year (Sep14)
to the end of last year (Sep15) was
(2789.89 + 2769.636 + 2513.507 + 2508.919 + 2496.811) / 5 = $2615.7526 Mil.
Total Assets at the begining of last year (Sep14) was $2,790 Mil.
Long-Term Debt was $839 Mil.
Total Current Assets was $1,069 Mil.
Total Current Liabilities was $758 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.

Dean Foods Co's current net income (TTM) was 106. ==> 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.

Dean Foods Co's current cash flow from operations (TTM) was 271. ==> 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 (Sep15)
=105.578/2496.811
=0.04228514

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=-21.711/2789.89
=-0.00778203

Dean Foods Co's return on assets of this year was 0.04228514. Dean Foods Co's return on assets of last year was -0.00778203. ==> This year is higher. ==> Score 1.

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.

Dean Foods Co's current net income (TTM) was 106. Dean Foods Co's current cash flow from operations (TTM) was 271. ==> 271 > 106 ==> 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: Sep16)=Long-Term Debt/Average Total Assets from Sep15 to Sep16
=895.015/2514.8652
=0.35588985

Gearing (Last Year: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=839.374/2615.7526
=0.32089197

Dean Foods Co's gearing of this year was 0.35588985. Dean Foods Co's gearing of last year was 0.32089197. ==> Last year is lower than this year ==> Score 0.

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: Sep16)=Total Current Assets/Total Current Liabilities
=1019.742/682.428
=1.49428511

Current Ratio (Last Year: Sep15)=Total Current Assets/Total Current Liabilities
=1069.006/758.196
=1.40993358

Dean Foods Co's current ratio of this year was 1.49428511. Dean Foods Co's current ratio of last year was 1.40993358. ==> This year's current ratio is higher. ==> Score 1.

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.

Dean Foods Co's number of shares in issue this year was 91. Dean Foods Co's number of shares in issue last year was 93.8. ==> 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
=1994.567/7714.717
=0.25854053

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1907.338/8494.168
=0.22454677

Dean Foods Co's gross margin of this year was 0.25854053. Dean Foods Co's gross margin of last year was 0.22454677. ==> This year's gross margin is higher. ==> Score 1.

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 (Sep15)
=7714.717/2496.811
=3.08982818

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=8494.168/2789.89
=3.0446247

Dean Foods Co's asset turnover of this year was 3.08982818. Dean Foods Co's asset turnover of last year was 3.0446247. ==> 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+1+1+0+1+1+1+1
=8

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

Dean Foods Co has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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 local exchange's currency.

Dean Foods Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111101100
Question 2 1111111011
Question 3 0011001101
Question 4 1111111011
Question 5 1011101101
Question 6 0101111010
Question 7 1100000011
Question 8 1011001001
Question 9 1110001010
F-score 7677538356

Dean Foods Co Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Question 1 1000000111
Question 2 0011111111
Question 3 1000011111
Question 4 0111111111
Question 5 0000111000
Question 6 1010000111
Question 7 0111001111
Question 8 0000111111
Question 9 1111100001
F-score 4354556778
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