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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 = 8 or 9
Bad or low score = 0 or 1

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

FRA:WAZ' s 10-Year Piotroski F-Score Range
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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 71.3444198078 + 50.906589428 + 103.95154185 + 71.8826979472 = €298 Mil.
Cash Flow from Operations was 78.5898004435 + 83.8196958726 + 105.206314244 + 76.8071847507 = €344 Mil.
Revenue was 356.098300074 + 311.736422882 + 415.160058737 + 335.276392962 = €1,418 Mil.
Gross Profit was 206.909090909 + 175.806661839 + 247.031571219 + 194.830645161 = €825 Mil.
Total Assets at the begining of this year (Jun13) was €2,510 Mil.
Total Assets was €2,755 Mil.
Long-Term Debt was €857 Mil.
Total Current Assets was €1,981 Mil.
Total Current Liabilities was €439 Mil.
Net Income was 68.230710466 + 92.8366564417 + 132.288721805 + 76.4140323824 = €370 Mil.

Revenue was 344.625668449 + 330.013803681 + 392.305263158 + 346.917501928 = €1,414 Mil.
Gross Profit was 200.753246753 + 196.142638037 + 235.641353383 + 206.052428682 = €839 Mil.
Total Assets at the begining of last year (Jun12) was €2,346 Mil.
Total Assets was €2,510 Mil.
Long-Term Debt was €867 Mil.
Total Current Assets was €1,791 Mil.
Total Current Liabilities was €363 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.

Waters Corp's current net income was 298. ==> 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.

Waters Corp's current cash flow from operations was 344. ==> 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 (This Year)=Net Income/Total Assets at the beginning of this year (Jun13)
=298.085249033/2509.95339954
=0.11876127

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=369.770121095/2346.26200163
=0.15759967

Waters Corp's return on assets of this year was 0.11876127. Waters Corp's return on assets of last year was 0.15759967. ==> 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.

Waters Corp's current net income was 298. Waters Corp's current cash flow from operations was 344. ==> 344 > 298 ==> 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)=Long-Term Debt/Total Assets
=857.354028086/2755.01108647
=0.31119803

Gearing (Last Year)=Long-Term Debt/Total Assets
=867.074102368/2509.95339954
=0.34545426

Waters Corp's gearing of this year was 0.31119803. Waters Corp's gearing of last year was 0.34545426. ==> 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)=Total Current Assets/Total Current Liabilities
=1981.23133777/439.460458241
=4.50832675

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1790.89228419/362.836516425
=4.93581049

Waters Corp's current ratio of this year was 4.50832675. Waters Corp's current ratio of last year was 4.93581049. ==> 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.

Waters Corp's number of shares in issue this year was 85.2. Waters Corp's number of shares in issue last year was 86.6. ==> 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)=Gross Profit/Revenue
=824.577969128/1418.27117465
=0.58139655

Gross Margin (Last Year)=Gross Profit/Revenue
=838.589666855/1413.86223722
=0.59311979

Waters Corp's gross margin of this year was 0.58139655. Waters Corp's gross margin of last year was 0.59311979. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Jun13)
=1418.27117465/2509.95339954
=0.56505877

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=1413.86223722/2346.26200163
=0.60260203

Waters Corp's asset turnover of this year was 0.56505877. Waters Corp's asset turnover of last year was 0.60260203. ==> 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 = 8 or 9

Bad or low score = 0 or 1

Waters 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.

Waters Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1001101000
Q4 1111111101
Q5 0011010100
Q6 1001101011
Q7 1111111111
Q8 1000110100
Q9 1000101000
F-score 8457867645

Waters Corp Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 0000000000
Q4 1110000111
Q5 0110000011
Q6 1001111100
Q7 1111111111
Q8 1100000000
Q9 0000000000
F-score 6654455555
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