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Hewlett-Packard Co (NYSE:HPQ)
Piotroski F-Score
9 (As of Today)

Good Sign:

Piotroski F-Score of 9 is 9, indicating very healthy situation.

The zones of discrimination were as such:

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

Hewlett-Packard Co has an F-score of 9. It is a good or high score, which usually indicates a very healthy situation.

HPQ' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 9

3
9

During the past 13 years, the highest Piotroski F-Score of Hewlett-Packard 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 own currency.

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Net Income was 1273 + 1425 + 1414 + 1390 = $5,502 Mil.
Cash Flow from Operations was 2995 + 2990 + 2816 + 2674 = $11,475 Mil.
Revenue was 27309 + 28154 + 29131 + 27226 = $111,820 Mil.
Gross Profit was 6605 + 6418 + 6694 + 6367 = $26,084 Mil.
Total Assets at the begining of this year (Apr13) was $106,254 Mil.
Total Assets was $103,972 Mil.
Long-Term Debt was $17,190 Mil.
Total Current Assets was $49,883 Mil.
Total Current Liabilities was $43,280 Mil.
Net Income was 1077 + 1232 + -6854 + -8857 = $-13,402 Mil.

Revenue was 27582 + 28359 + 29959 + 29669 = $115,569 Mil.
Gross Profit was 6527 + 6330 + 7248 + 6849 = $26,954 Mil.
Total Assets at the begining of last year (Apr12) was $127,689 Mil.
Total Assets was $106,254 Mil.
Long-Term Debt was $19,863 Mil.
Total Current Assets was $49,571 Mil.
Total Current Liabilities was $44,658 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.

Hewlett-Packard Co's current net income was 5,502. ==> 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.

Hewlett-Packard Co's current cash flow from operations was 11,475. ==> 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 (Apr13)
=5502/106254
=0.05178158

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Apr12)
=-13402/127689
=-0.10495814

Hewlett-Packard Co's return on assets of this year was 0.05178158. Hewlett-Packard Co's return on assets of last year was -0.10495814. ==> This year is higher. ==> Score 1.

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.

Hewlett-Packard Co's current net income was 5,502. Hewlett-Packard Co's current cash flow from operations was 11,475. ==> 11,475 > 5,502 ==> 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
=17190/103972
=0.16533297

Gearing (Last Year)=Long-Term Debt/Total Assets
=19863/106254
=0.18693884

Hewlett-Packard Co's gearing of this year was 0.16533297. Hewlett-Packard Co's gearing of last year was 0.18693884. ==> 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
=49883/43280
=1.1525647

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=49571/44658
=1.11001388

Hewlett-Packard Co's current ratio of this year was 1.1525647. Hewlett-Packard Co's current ratio of last year was 1.11001388. ==> This year's current ratio is higher. ==> Score 1.

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.

Hewlett-Packard Co's number of shares in issue this year was 1916. Hewlett-Packard Co's number of shares in issue last year was 1947. ==> 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
=26084/111820
=0.23326775

Gross Margin (Last Year)=Gross Profit/Revenue
=26954/115569
=0.23322863

Hewlett-Packard Co's gross margin of this year was 0.23326775. Hewlett-Packard Co's gross margin of last year was 0.23322863. ==> This year's gross margin is higher. ==> Score 1.

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 (Apr13)
=111820/106254
=1.05238391

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Apr12)
=115569/127689
=0.90508188

Hewlett-Packard Co's asset turnover of this year was 1.05238391. Hewlett-Packard Co's asset turnover of last year was 0.90508188. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+1+1+1+1
=9

Good or high score = 8 or 9

Bad or low score = 0 or 1

Hewlett-Packard Co has an F-score of 9. 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.

Hewlett-Packard Co Annual Data

Oct04Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13
Q1 1111111101
Q2 1111111111
Q3 1011101001
Q4 1111111111
Q5 1110000001
Q6 0000010011
Q7 1111111111
Q8 0011101000
Q9 1111101001
F-score 7687757448

Hewlett-Packard Co Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 1000001111
Q2 1111111111
Q3 0000011111
Q4 1111111111
Q5 0000111110
Q6 1011001111
Q7 1111111111
Q8 0001110011
Q9 0000001111
F-score 5345568890
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