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EMC Corp (NYSE:EMC)
Piotroski F-Score
5 (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

EMC Corp has an F-score of 5 indicating the company's financial situation is typical for a stable company.

EMC' s 10-Year Piotroski F-Score Range
Min: 4   Max: 9
Current: 5

4
9

During the past 13 years, the highest Piotroski F-Score of EMC Corp was 9. The lowest was 4. 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 1022 + 392 + 589 + 587 = $2,590 Mil.
Cash Flow from Operations was 2190 + 1338 + 1254 + 1700 = $6,482 Mil.
Revenue was 6682 + 5479 + 5880 + 6032 = $24,073 Mil.
Gross Profit was 4224 + 3347 + 3654 + 3743 = $14,968 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(44602 + 45849 + 44047 + 44438 + 45028) / 5 = $44792.8 Mil.
Total Assets at the begining of this year (Sep13) was $44,602 Mil.
Long-Term Debt was $5,494 Mil.
Total Current Assets was $14,419 Mil.
Total Current Liabilities was $10,135 Mil.
Net Income was 870 + 580 + 701 + 586 = $2,737 Mil.

Revenue was 6030 + 5387 + 5614 + 5539 = $22,570 Mil.
Gross Profit was 3890 + 3298 + 3509 + 3442 = $14,139 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(36505.718 + 37962 + 38234.257 + 44398 + 44602) / 5 = $40340.395 Mil.
Total Assets at the begining of last year (Sep12) was $36,506 Mil.
Long-Term Debt was $5,493 Mil.
Total Current Assets was $16,447 Mil.
Total Current Liabilities was $10,759 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.

EMC Corp's current net income (TTM) was 2,590. ==> 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.

EMC Corp's current cash flow from operations (TTM) was 6,482. ==> 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 (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=2737/36505.718
=0.07497456

EMC Corp's return on assets of this year was 0.05806914. EMC Corp's return on assets of last year was 0.07497456. ==> 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.

EMC Corp's current net income (TTM) was 2,590. EMC Corp's current cash flow from operations (TTM) was 6,482. ==> 6,482 > 2,590 ==> 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: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=5494/44792.8
=0.12265364

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=5493/40340.395
=0.13616624

EMC Corp's gearing of this year was 0.12265364. EMC Corp's gearing of last year was 0.13616624. ==> This year is lower or equal to last year. ==> Score 1.

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: Sep14)=Total Current Assets/Total Current Liabilities
=14419/10135
=1.42269364

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=16447/10759
=1.52867367

EMC Corp's current ratio of this year was 1.42269364. EMC Corp's current ratio of last year was 1.52867367. ==> 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.

EMC Corp's number of shares in issue this year was 2057. EMC Corp's number of shares in issue last year was 2165. ==> 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
=14968/24073
=0.62177543

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=14139/22570
=0.62645104

EMC Corp's gross margin of this year was 0.62177543. EMC Corp's gross margin of last year was 0.62645104. ==> 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 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 (Sep13)
=24073/44602
=0.53972916

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=22570/36505.718
=0.61825931

EMC Corp's asset turnover of this year was 0.53972916. EMC Corp's asset turnover of last year was 0.61825931. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+0+1+0+0
=5

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

EMC Corp has an F-score of 5 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.

EMC Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1101001100
Q4 1111111111
Q5 1101111010
Q6 0101010111
Q7 0111110011
Q8 1101101110
Q9 0111001100
F-score 6959667775

EMC Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 1100000000
Q4 1111111111
Q5 1111000011
Q6 1110111100
Q7 1001111111
Q8 1111110000
Q9 0000000000
F-score 8766665555
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