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Waters Corp (FRA:WAZ)
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

Waters Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

FRA:WAZ' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 7

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 (Mar15) TTM:Last Year (Mar14) TTM:
Net Income was 71.0294334069 + 88.0504266874 + 122.702351987 + 88.780961183 = €371 Mil.
Cash Flow from Operations was 78.2428256071 + 99.1768813033 + 131.161394972 + 142.874306839 = €451 Mil.
Revenue was 354.526122149 + 382.595034911 + 473.536090835 + 425.512014787 = €1,636 Mil.
Gross Profit was 205.995584989 + 225.712179984 + 284.469586375 + 250.608133087 = €967 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(2638.99855387 + 2742.84768212 + 2910.5321955 + 3145.12084347 + 3579.22920518) / 5 = €3003.34569603 Mil.
Total Assets at the begining of this year (Mar14) was €2,639 Mil.
Long-Term Debt was €1,211 Mil.
Total Current Assets was €2,658 Mil.
Total Current Liabilities was €498 Mil.
Net Income was 67.713419257 + 73.4441947566 + 103.193877551 + 50.8329718004 = €295 Mil.

Revenue was 342.012888552 + 342.559550562 + 412.134110787 + 311.285610991 = €1,408 Mil.
Gross Profit was 199.231235785 + 199.062921348 + 245.231049563 + 175.55242227 = €819 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(2476.69266409 + 2490.92418499 + 2565.78202247 + 2611.24562682 + 2638.99855387) / 5 = €2556.72861045 Mil.
Total Assets at the begining of last year (Mar13) was €2,477 Mil.
Long-Term Debt was €795 Mil.
Total Current Assets was €1,886 Mil.
Total Current Liabilities was €423 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 371. ==> 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 451. ==> 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 (Mar14)
=370.563173264/2638.99855387
=0.1404181

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=295.184463365/2476.69266409
=0.11918494

Waters Corp's return on assets of this year was 0.1404181. Waters Corp's return on assets of last year was 0.11918494. ==> 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.

Waters Corp's current net income (TTM) was 371. Waters Corp's current cash flow from operations (TTM) was 451. ==> 451 > 371 ==> 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: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=1210.72088725/3003.34569603
=0.40312405

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=795.372378886/2556.72861045
=0.31108987

Waters Corp's gearing of this year was 0.40312405. Waters Corp's gearing of last year was 0.31108987. ==> 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: Mar15)=Total Current Assets/Total Current Liabilities
=2658.01571165/497.662661738
=5.34099887

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=1885.54519161/422.594360087
=4.46183236

Waters Corp's current ratio of this year was 5.34099887. Waters Corp's current ratio of last year was 4.46183236. ==> 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 83.8. Waters Corp's number of shares in issue last year was 85.9. ==> 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
=966.785484435/1636.16926268
=0.59088354

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=819.077628966/1407.99216089
=0.58173451

Waters Corp's gross margin of this year was 0.59088354. Waters Corp's gross margin of last year was 0.58173451. ==> 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 (Mar14)
=1636.16926268/2638.99855387
=0.61999627

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=1407.99216089/2476.69266409
=0.56849692

Waters Corp's asset turnover of this year was 0.61999627. Waters Corp's asset turnover of last year was 0.56849692. ==> 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

Waters Corp 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 own currency.

Waters Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 0011010000
Question 4 1111111011
Question 5 0110101010
Question 6 0011010110
Question 7 1111111111
Question 8 0001101000
Question 9 0011010001
F-score 4588676465

Waters Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 1111111111
Question 3 0000000001
Question 4 0000111111
Question 5 0000111100
Question 6 1111100001
Question 7 1111111111
Question 8 0000000001
Question 9 0000000001
F-score 4455655557
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