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Illumina Inc (NAS:ILMN)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, 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

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

ILMN' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 8

1
8

During the past 13 years, the highest Piotroski F-Score of Illumina Inc was 8. The lowest was 1. And the median was 5.


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 46.605 + 93.489 + 153.28 + 136.658 = $430 Mil.
Cash Flow from Operations was 178.03 + 145.605 + 140.549 + 66.779 = $531 Mil.
Revenue was 447.568 + 480.63 + 512.379 + 538.565 = $1,979 Mil.
Gross Profit was 300.54 + 333.941 + 384.937 + 375.027 = $1,394 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(3053.57 + 3035.055 + 3278.206 + 3339.64 + 3499.093) / 5 = $3241.1128 Mil.
Total Assets at the begining of this year (Mar14) was $3,054 Mil.
Long-Term Debt was $994 Mil.
Total Current Assets was $2,060 Mil.
Total Current Liabilities was $710 Mil.
Net Income was 35.877 + 31.357 + 80.661 + 59.977 = $208 Mil.

Revenue was 346.094 + 356.8 + 387.326 + 420.781 = $1,511 Mil.
Gross Profit was 223.409 + 209.94 + 259.246 + 278.292 = $971 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(2744.188 + 2823.202 + 2817.696 + 3019.006 + 3053.57) / 5 = $2891.5324 Mil.
Total Assets at the begining of last year (Mar13) was $2,744 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,632 Mil.
Total Current Liabilities was $1,150 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.

Illumina Inc's current net income (TTM) was 430. ==> 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.

Illumina Inc's current cash flow from operations (TTM) was 531. ==> 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)
=430.032/3053.57
=0.14082926

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=207.872/2744.188
=0.07574991

Illumina Inc's return on assets of this year was 0.14082926. Illumina Inc's return on assets of last year was 0.07574991. ==> 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.

Illumina Inc's current net income (TTM) was 430. Illumina Inc's current cash flow from operations (TTM) was 531. ==> 531 > 430 ==> 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
=993.777/3241.1128
=0.30661599

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=0/2891.5324
=0

Illumina Inc's gearing of this year was 0.30661599. Illumina Inc's gearing of last year was 0. ==> 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
=2060.281/710.251
=2.90077874

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=1631.943/1149.779
=1.41935363

Illumina Inc's current ratio of this year was 2.90077874. Illumina Inc's current ratio of last year was 1.41935363. ==> 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.

Illumina Inc's number of shares in issue this year was 148.7. Illumina Inc's number of shares in issue last year was 150.6. ==> 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
=1394.445/1979.142
=0.70457047

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=970.887/1511.001
=0.64254557

Illumina Inc's gross margin of this year was 0.70457047. Illumina Inc's gross margin of last year was 0.64254557. ==> 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)
=1979.142/3053.57
=0.64814037

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=1511.001/2744.188
=0.55061862

Illumina Inc's asset turnover of this year was 0.64814037. Illumina Inc's asset turnover of last year was 0.55061862. ==> 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

Illumina Inc 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.

Illumina Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 0101111111
Question 2 0111111111
Question 3 0101110101
Question 4 1011111111
Question 5 0101110110
Question 6 0100011000
Question 7 0000001000
Question 8 0001101101
Question 9 1100010011
F-score 2626676656

Illumina Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 1111111111
Question 3 1111011111
Question 4 1111111111
Question 5 1111110000
Question 6 0000000001
Question 7 0100000001
Question 8 1100000111
Question 9 0111111111
F-score 6866565668
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