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Fomento Economico Mexicano SAB de CV (NYSE:FMX)
Piotroski F-Score
2 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Fomento Economico Mexicano SAB de CV has an F-score of 2. It is a bad or low score, which usually implies poor business operation.

FMX' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 2

2
8

During the past 13 years, the highest Piotroski F-Score of Fomento Economico Mexicano SAB de CV was 8. The lowest was 2. And the median was 4.


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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was 252.549671376 + 570.641506835 + 143.986874487 + 172.360328699 = $1,140 Mil.
Cash Flow from Operations was 0 + 0 + 0 + 0 = $0 Mil.
Revenue was 3156.37984438 + 9664.61210013 + 2255.88187039 + 2361.23313866 = $17,438 Mil.
Gross Profit was 1479.56485609 + 3617.98836128 + 1034.15914684 + 1130.03255982 = $7,262 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(28090.7705569 + 16612.5254967 + 25906.3393134 + 13326.0049221 + 13410.6413768) / 5 = $19469.2563332 Mil.
Total Assets at the begining of this year (Jun14) was $28,091 Mil.
Long-Term Debt was $4,259 Mil.
Total Current Assets was $2,223 Mil.
Total Current Liabilities was $1,865 Mil.
Net Income was 467.713519724 + 54.189085319 + 188.584855605 + 232.275344026 = $943 Mil.

Revenue was 4900.57449253 + 5647.9631053 + 4868.33927083 + 5461.01037466 = $20,878 Mil.
Gross Profit was 2071.00727691 + 2447.57878555 + 2009.47472144 + 2290.73669304 = $8,819 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(24913.7611848 + 26266.4113367 + 27608.9162183 + 27106.1926779 + 28090.7705569) / 5 = $26797.2103949 Mil.
Total Assets at the begining of last year (Jun13) was $24,914 Mil.
Long-Term Debt was $5,679 Mil.
Total Current Assets was $6,116 Mil.
Total Current Liabilities was $3,996 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.

Fomento Economico Mexicano SAB de CV's current net income (TTM) was 1,140. ==> 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.

Fomento Economico Mexicano SAB de CV's current cash flow from operations (TTM) was 0. ==> Negative ==> Score 0.

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 (Jun14)
=1139.5383814/28090.7705569
=0.04056629

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=942.762804675/24913.7611848
=0.03784105

Fomento Economico Mexicano SAB de CV's return on assets of this year was 0.04056629. Fomento Economico Mexicano SAB de CV's return on assets of last year was 0.03784105. ==> 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.

Fomento Economico Mexicano SAB de CV's current net income (TTM) was 1,140. Fomento Economico Mexicano SAB de CV's current cash flow from operations (TTM) was 0. ==> 0 <= 1,140 ==> CFROA <= ROA ==> Score 0.

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: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=4259.13483901/19469.2563332
=0.21876207

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=5678.8935751/26797.2103949
=0.21192107

Fomento Economico Mexicano SAB de CV's gearing of this year was 0.21876207. Fomento Economico Mexicano SAB de CV's gearing of last year was 0.21192107. ==> 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: Jun15)=Total Current Assets/Total Current Liabilities
=2223.43531965/1865.47108378
=1.19188946

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=6116.19924268/3996.16722593
=1.53051634

Fomento Economico Mexicano SAB de CV's current ratio of this year was 1.19188946. Fomento Economico Mexicano SAB de CV's current ratio of last year was 1.53051634. ==> Last year's current ratio is higher ==> Score 0.

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.

Fomento Economico Mexicano SAB de CV's number of shares in issue this year was 41.5. Fomento Economico Mexicano SAB de CV's number of shares in issue last year was 0. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=7261.74492403/17438.1069536
=0.41642966

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=8818.79747694/20877.8872433
=0.42239894

Fomento Economico Mexicano SAB de CV's gross margin of this year was 0.41642966. Fomento Economico Mexicano SAB de CV's gross margin of last year was 0.42239894. ==> 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 (Jun14)
=17438.1069536/28090.7705569
=0.6207771

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=20877.8872433/24913.7611848
=0.83800624

Fomento Economico Mexicano SAB de CV's asset turnover of this year was 0.6207771. Fomento Economico Mexicano SAB de CV's asset turnover of last year was 0.83800624. ==> 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+0+1+0+0+0+0+0+0
=2

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

Fomento Economico Mexicano SAB de CV has an F-score of 2. It is a bad or low score, which usually implies poor business operation.


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.

Fomento Economico Mexicano SAB de CV Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 0001111000
Question 3 0011010101
Question 4 0000101000
Question 5 1111011000
Question 6 1000110101
Question 7 1101010111
Question 8 0001000100
Question 9 0010101100
F-score 4346565624

Fomento Economico Mexicano SAB de CV Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1111111111
Question 2 0000000000
Question 3 1110000111
Question 4 0000000000
Question 5 0000000010
Question 6 0100110100
Question 7 0011111111
Question 8 1110001000
Question 9 1100000000
F-score 4542333443
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