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

The zones of discrimination were as such:

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

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

ILMN' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 6

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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 80.661 + 59.977 + 46.605 + 93.489 = $281 Mil.
Cash Flow from Operations was 126.839 + 37.087 + 178.03 + 145.605 = $488 Mil.
Revenue was 387.326 + 420.781 + 447.568 + 480.63 = $1,736 Mil.
Gross Profit was 259.246 + 278.292 + 300.54 + 333.941 = $1,172 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(2817.696 + 3019.006 + 3053.57 + 3035.055 + 3278.206) / 5 = $3,041 Mil.
Total Assets as of Sep13 was $2,818 Mil.
Long-Term Debt was $980 Mil.
Total Current Assets was $1,907 Mil.
Total Current Liabilities was $856 Mil.
Net Income was 71.903 + -22.587 + 35.877 + 31.357 = $117 Mil.

Revenue was 309.265 + 330.958 + 346.094 + 356.8 = $1,343 Mil.
Gross Profit was 203.647 + 219.292 + 223.409 + 209.94 = $856 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(2437.983 + 2566.085 + 2744.188 + 2823.202 + 2817.696) / 5 = $2,678 Mil.
Total Assets as of Sep12 was $2,438 Mil.
Long-Term Debt was $831 Mil.
Total Current Assets was $1,538 Mil.
Total Current Liabilities was $419 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Illumina Inc's current net income (ttm) was 281. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Illumina Inc's current cash flow from operations (ttm) was 488. ==> 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 (TTM)/Beginning of This Year Total Assets (Sep13)
=280.732/2817.696
=0.09963176

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Sep12)
=116.55/2437.983
=0.04780591

Illumina Inc's return on assets of this year was 0.09963176. Illumina Inc's return on assets of last year was 0.04780591. ==> 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.

Illumina Inc's current net income (ttm) was 281. Illumina Inc's current cash flow from operations (ttm) was 488. ==> 488 > 281 ==> 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: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=979.836/3040.7066
=0.32223957

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=830.69/2677.8308
=0.31021004

Illumina Inc's gearing of this year was 0.32223957. Illumina Inc's gearing of last year was 0.31021004. ==> Last year is lower than this year ==> Score 0.

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: Sep14)=Total Current Assets/Total Current Liabilities
=1906.954/856.401
=2.22670688

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=1537.646/418.925
=3.67045653

Illumina Inc's current ratio of this year was 2.22670688. Illumina Inc's current ratio of last year was 3.67045653. ==> 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.

Illumina Inc's number of shares in issue this year was 147.5. Illumina Inc's number of shares in issue last year was 140.6. ==> There is larger number of shares in issue this year. ==> Score 0.

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: TTM)=Gross Profit/Revenue
=1172.019/1736.305
=0.67500756

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=856.288/1343.117
=0.63753791

Illumina Inc's gross margin of this year was 0.67500756. Illumina Inc's gross margin of last year was 0.63753791. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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)/Beginning of This Year Total Assets (Sep13)
=1736.305/2817.696
=0.61621445

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Sep12)
=1343.117/2437.983
=0.55091319

Illumina Inc's asset turnover of this year was 0.61621445. Illumina Inc's asset turnover of last year was 0.55091319. ==> 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+0+0+0+1+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Illumina Inc 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, Altman Z-Score, Beneish M-Score


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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 0010111111
Q2 0011111111
Q3 1010111010
Q4 0101111111
Q5 1010111011
Q6 0010011100
Q7 0000000110
Q8 1000110010
Q9 1110001001
F-score 4262677575

Illumina Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 0011110111
Q4 1111111111
Q5 1111111100
Q6 0100000000
Q7 1101000000
Q8 1111000001
Q9 0001111111
F-score 6768665656
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