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EMC Corp (NYSE:EMC)
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

EMC Corp has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

EMC' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 9
Current: 7

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 (Mar16) TTM:Last Year (Mar15) TTM:
Net Income was 487 + 480 + 771 + 268 = $2,006 Mil.
Cash Flow from Operations was 1033 + 1403 + 1870 + 932 = $5,238 Mil.
Revenue was 5997 + 6079 + 7014 + 5475 = $24,565 Mil.
Gross Profit was 3587 + 3705 + 4360 + 3260 = $14,912 Mil.
Average Total Assets from the begining of this year (Mar15)
to the end of this year (Mar16) was
(43293 + 44867 + 45345 + 46612 + 45703) / 5 = $45164 Mil.
Total Assets at the begining of this year (Mar15) was $43,293 Mil.
Long-Term Debt was $5,477 Mil.
Total Current Assets was $14,600 Mil.
Total Current Liabilities was $11,286 Mil.
Net Income was 589 + 587 + 1146 + 252 = $2,574 Mil.

Revenue was 5880 + 6032 + 7049 + 5613 = $24,574 Mil.
Gross Profit was 3654 + 3743 + 4505 + 3339 = $15,241 Mil.
Average Total Assets from the begining of last year (Mar14)
to the end of last year (Mar15) was
(44047 + 44438 + 45028 + 45585 + 43293) / 5 = $44478.2 Mil.
Total Assets at the begining of last year (Mar14) was $44,047 Mil.
Long-Term Debt was $5,495 Mil.
Total Current Assets was $12,563 Mil.
Total Current Liabilities was $10,481 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.

EMC Corp's current net income (TTM) was 2,006. ==> 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.

EMC Corp's current cash flow from operations (TTM) was 5,238. ==> 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.

EMC Corp's return on assets of this year was 0.04633544. EMC Corp's return on assets of last year was 0.05843758. ==> 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.

EMC Corp's current net income (TTM) was 2,006. EMC Corp's current cash flow from operations (TTM) was 5,238. ==> 5,238 > 2,006 ==> 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
=5477/45164
=0.12126915

Gearing (Last Year: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=5495/44478.2
=0.12354367

EMC Corp's gearing of this year was 0.12126915. EMC Corp's gearing of last year was 0.12354367. ==> 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: Mar16)=Total Current Assets/Total Current Liabilities
=14600/11286
=1.29363814

Current Ratio (Last Year: Mar15)=Total Current Assets/Total Current Liabilities
=12563/10481
=1.19864517

EMC Corp's current ratio of this year was 1.29363814. EMC Corp's current ratio of last year was 1.19864517. ==> 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.

EMC Corp's number of shares in issue this year was 1965. EMC Corp's number of shares in issue last year was 1996. ==> 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
=14912/24565
=0.60704254

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=15241/24574
=0.62020835

EMC Corp's gross margin of this year was 0.60704254. EMC Corp's gross margin of last year was 0.62020835. ==> 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 (Mar15)
=24565/43293
=0.56741275

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=24574/44047
=0.55790406

EMC Corp's asset turnover of this year was 0.56741275. EMC Corp's asset turnover of last year was 0.55790406. ==> 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+1+1+0+1
=7

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

EMC Corp 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.

EMC Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 0100110000
Question 4 1111111111
Question 5 0111101011
Question 6 0101011100
Question 7 1111001111
Question 8 0110111010
Question 9 1100110001
F-score 5966777566

EMC Corp Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Question 1 1111111111
Question 2 1111111111
Question 3 0000000000
Question 4 1111111111
Question 5 0011111111
Question 6 1100000001
Question 7 1111111111
Question 8 0000100000
Question 9 0000001111
F-score 5555656667
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