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Express Scripts Holding Co (NAS:ESRX)
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

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

ESRX' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 8

3
9

During the past 13 years, the highest Piotroski F-Score of Express Scripts Holding Co was 9. 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 local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Net Income was 773.5 + 526.1 + 720.7 + 722.9 = $2,743 Mil.
Cash Flow from Operations was 2874 + 751.2 + 438.9 + 1480.4 = $5,545 Mil.
Revenue was 26175.4 + 24791.8 + 25222.3 + 25410.1 = $101,600 Mil.
Gross Profit was 2263.2 + 1847 + 2161.2 + 2274.1 = $8,546 Mil.
Average Total Assets from the begining of this year (Sep15)
to the end of this year (Sep16) was
(51996.5 + 53243.3 + 51107.6 + 50858.6 + 50909.3) / 5 = $51623.06 Mil.
Total Assets at the begining of this year (Sep15) was $51,997 Mil.
Long-Term Debt was $14,925 Mil.
Total Current Assets was $11,123 Mil.
Total Current Liabilities was $15,979 Mil.
Net Income was 581.8 + 441.1 + 600.1 + 661.7 = $2,285 Mil.

Revenue was 26312.6 + 24899.6 + 25454.2 + 25222.6 = $101,889 Mil.
Gross Profit was 2094 + 1834 + 2131.2 + 2173.5 = $8,233 Mil.
Average Total Assets from the begining of last year (Sep14)
to the end of last year (Sep15) was
(53439.2 + 53748.3 + 51905.1 + 51867.8 + 51996.5) / 5 = $52591.38 Mil.
Total Assets at the begining of last year (Sep14) was $53,439 Mil.
Long-Term Debt was $14,038 Mil.
Total Current Assets was $10,274 Mil.
Total Current Liabilities was $16,014 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.

Express Scripts Holding Co's current net income (TTM) was 2,743. ==> 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.

Express Scripts Holding Co's current cash flow from operations (TTM) was 5,545. ==> 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)
=2743.2/51996.5
=0.0527574

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=2284.7/53439.2
=0.04275326

Express Scripts Holding Co's return on assets of this year was 0.0527574. Express Scripts Holding Co's return on assets of last year was 0.04275326. ==> 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.

Express Scripts Holding Co's current net income (TTM) was 2,743. Express Scripts Holding Co's current cash flow from operations (TTM) was 5,545. ==> 5,545 > 2,743 ==> 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
=14924.5/51623.06
=0.2891053

Gearing (Last Year: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=14037.7/52591.38
=0.26692017

Express Scripts Holding Co's gearing of this year was 0.2891053. Express Scripts Holding Co's gearing of last year was 0.26692017. ==> 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
=11123/15978.5
=0.69612292

Current Ratio (Last Year: Sep15)=Total Current Assets/Total Current Liabilities
=10274.4/16013.8
=0.64159662

Express Scripts Holding Co's current ratio of this year was 0.69612292. Express Scripts Holding Co's current ratio of last year was 0.64159662. ==> 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.

Express Scripts Holding Co's number of shares in issue this year was 627.1. Express Scripts Holding Co's number of shares in issue last year was 682.2. ==> 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
=8545.5/101599.6
=0.08410958

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=8232.7/101889
=0.08080068

Express Scripts Holding Co's gross margin of this year was 0.08410958. Express Scripts Holding Co's gross margin of last year was 0.08080068. ==> 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)
=101599.6/51996.5
=1.95396998

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=101889/53439.2
=1.90663408

Express Scripts Holding Co's asset turnover of this year was 1.95396998. Express Scripts Holding Co's asset turnover of last year was 1.90663408. ==> 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

Express Scripts Holding 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.

Express Scripts Holding Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 0111010011
Question 4 1111111111
Question 5 1010101110
Question 6 0101010001
Question 7 1110010011
Question 8 1110011111
Question 9 0111011011
F-score 6886486588

Express Scripts Holding Co Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Question 1 1111111111
Question 2 1111111111
Question 3 1111111111
Question 4 1111111111
Question 5 1111000010
Question 6 0001011001
Question 7 1111111111
Question 8 0011111111
Question 9 1011111111
F-score 7689788788
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