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

Good Sign:

Piotroski F-Score of 7 is 7, 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 7. 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: 7

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 5.


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 (Mar16) TTM:Last Year (Mar15) TTM:
Net Income was 26.519 + 20.233 + 18.48 + 39.201 = $104 Mil.
Cash Flow from Operations was 114.192 + 50.257 + 86.125 + 46.23 = $297 Mil.
Revenue was 2014.706 + 2033.693 + 2022.5 + 1878.828 = $7,950 Mil.
Gross Profit was 495.641 + 491.988 + 508.471 + 504.068 = $2,000 Mil.
Average Total Assets from the begining of this year (Mar15)
to the end of this year (Mar16) was
(2513.507 + 2508.919 + 2496.811 + 2528.015 + 2452.354) / 5 = $2499.9212 Mil.
Total Assets at the begining of this year (Mar15) was $2,514 Mil.
Long-Term Debt was $834 Mil.
Total Current Assets was $1,046 Mil.
Total Current Liabilities was $668 Mil.
Net Income was -0.645 + -15.972 + 5.277 + -73.74 = $-85 Mil.

Revenue was 2393.869 + 2373.28 + 2395.007 + 2050.762 = $9,213 Mil.
Gross Profit was 399.088 + 416.8 + 441.4 + 478.309 = $1,736 Mil.
Average Total Assets from the begining of last year (Mar14)
to the end of last year (Mar15) was
(2863.442 + 2803.322 + 2789.89 + 2769.636 + 2513.507) / 5 = $2747.9594 Mil.
Total Assets at the begining of last year (Mar14) was $2,863 Mil.
Long-Term Debt was $852 Mil.
Total Current Assets was $1,041 Mil.
Total Current Liabilities was $714 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 104. ==> 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 297. ==> 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 (Mar15)
=104.433/2513.507
=0.04154872

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=-85.08/2863.442
=-0.02971249

Dean Foods Co's return on assets of this year was 0.04154872. Dean Foods Co's return on assets of last year was -0.02971249. ==> 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 104. Dean Foods Co's current cash flow from operations (TTM) was 297. ==> 297 > 104 ==> 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: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=833.704/2499.9212
=0.33349211

Gearing (Last Year: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=852.238/2747.9594
=0.31013486

Dean Foods Co's gearing of this year was 0.33349211. Dean Foods Co's gearing of last year was 0.31013486. ==> 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: Mar16)=Total Current Assets/Total Current Liabilities
=1046.289/668.005
=1.56628917

Current Ratio (Last Year: Mar15)=Total Current Assets/Total Current Liabilities
=1040.789/713.865
=1.45796334

Dean Foods Co's current ratio of this year was 1.56628917. Dean Foods Co's current ratio of last year was 1.45796334. ==> 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 92.2. Dean Foods Co's number of shares in issue last year was 94.2. ==> 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
=2000.168/7949.727
=0.2516021

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1735.597/9212.918
=0.18838733

Dean Foods Co's gross margin of this year was 0.2516021. Dean Foods Co's gross margin of last year was 0.18838733. ==> 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 (Mar15)
=7949.727/2513.507
=3.16280281

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=9212.918/2863.442
=3.21742784

Dean Foods Co's asset turnover of this year was 3.16280281. Dean Foods Co's asset turnover of last year was 3.21742784. ==> Last year's asset turnover is higher ==> Score 0.

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+0
=7

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

Dean Foods Co has an F-score of 7. 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 own currency.

Dean Foods Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111101100
Question 2 1111111011
Question 3 0011001101
Question 4 1111111011
Question 5 1011101100
Question 6 0101111010
Question 7 1100000011
Question 8 1011001001
Question 9 1110001010
F-score 7677538355

Dean Foods Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Question 1 1110000001
Question 2 0000111111
Question 3 1010000111
Question 4 0001111111
Question 5 1100001100
Question 6 0110100001
Question 7 0001110011
Question 8 0000001111
Question 9 0111111000
F-score 3443545557
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