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Waters Corp (FRA:WAZ)
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

Waters Corp has an F-score of 6 indicating the company's financial situation is typical for a stable company.

FRA:WAZ' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 8
Current: 5

4
8

During the past 13 years, the highest Piotroski F-Score of Waters Corp was 8. The lowest was 4. And the median was 7.


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 (Jun16) TTM:Last Year (Jun15) TTM:
Net Income was 103.609551813 + 138.670705958 + 84.4576149425 + 114.112673549 = €441 Mil.
Cash Flow from Operations was 123.935667825 + 141.054805839 + 143.57579023 + 139.746351015 = €548 Mil.
Revenue was 446.028691081 + 538.520150555 + 426.765445402 + 477.536489854 = €1,889 Mil.
Gross Profit was 261.760670053 + 320.109244469 + 246.134159483 + 281.3999644 = €1,109 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(3589.81021117 + 3672.14113873 + 3918.73404939 + 3922.76849856 + 3958.76913492) / 5 = €3812.44460656 Mil.
Total Assets at the begining of this year (Jun15) was €3,590 Mil.
Long-Term Debt was €1,452 Mil.
Total Current Assets was €3,031 Mil.
Total Current Liabilities was €465 Mil.
Net Income was 88.0709241872 + 122.702351987 + 88.7563522129 + 94.1432771986 = €394 Mil.

Revenue was 382.684100256 + 473.536090835 + 425.394068188 + 440.826873385 = €1,722 Mil.
Gross Profit was 225.764724141 + 284.469586375 + 250.538667652 + 254.863227301 = €1,016 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(2743.45330095 + 2911.20974626 + 3142.48986212 + 3578.23708768 + 3589.81021117) / 5 = €3193.04004164 Mil.
Total Assets at the begining of last year (Jun14) was €2,743 Mil.
Long-Term Debt was €1,234 Mil.
Total Current Assets was €2,679 Mil.
Total Current Liabilities was €487 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.

Waters Corp's current net income (TTM) was 441. ==> 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.

Waters Corp's current cash flow from operations (TTM) was 548. ==> 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 (Jun15)
=440.850546263/3589.81021117
=0.12280609

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=393.672905586/2743.45330095
=0.14349539

Waters Corp's return on assets of this year was 0.12280609. Waters Corp's return on assets of last year was 0.14349539. ==> 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.

Waters Corp's current net income (TTM) was 441. Waters Corp's current cash flow from operations (TTM) was 548. ==> 548 > 441 ==> 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: Jun16)=Long-Term Debt/Average Total Assets from Jun15 to Jun16
=1452.20541118/3812.44460656
=0.38091187

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=1234.07288604/3193.04004164
=0.38648838

Waters Corp's gearing of this year was 0.38091187. Waters Corp's gearing of last year was 0.38648838. ==> 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: Jun16)=Total Current Assets/Total Current Liabilities
=3031.27091492/465.115699537
=6.51724059

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=2679.28094092/487.119308563
=5.50025608

Waters Corp's current ratio of this year was 6.51724059. Waters Corp's current ratio of last year was 5.50025608. ==> 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.

Waters Corp's number of shares in issue this year was 81.5. Waters Corp's number of shares in issue last year was 83.3. ==> 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
=1109.4040384/1888.85077689
=0.5873434

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1015.63620547/1722.44113266
=0.5896493

Waters Corp's gross margin of this year was 0.5873434. Waters Corp's gross margin of last year was 0.5896493. ==> 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 (Jun15)
=1888.85077689/3589.81021117
=0.52617009

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=1722.44113266/2743.45330095
=0.62783687

Waters Corp's asset turnover of this year was 0.52617009. Waters Corp's asset turnover of last year was 0.62783687. ==> 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+0+1+1+1+1+0+0
=6

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

Waters Corp has an F-score of 6 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.

Waters Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 0111100001
Question 4 1111110111
Question 5 1101010100
Question 6 0110101101
Question 7 1111111111
Question 8 0011010001
Question 9 0101100001
F-score 5878764648

Waters Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1111111111
Question 2 1111111111
Question 3 0000111100
Question 4 1111111111
Question 5 1110000011
Question 6 0000111111
Question 7 1111111111
Question 8 0000111100
Question 9 0000111100
F-score 5554888866
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