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KLA-Tencor Corp (NAS:KLAC)
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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

KLA-Tencor Corp has an F-score of 9. It is a good or high score, which usually indicates a very healthy situation.

KLAC' 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 KLA-Tencor Corp 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 139.246 + 203.581 + 128.731 + 72.233 = $544 Mil.
Cash Flow from Operations was 115.271 + 237.727 + 248.64 + 34.926 = $637 Mil.
Revenue was 705.129 + 831.599 + 734.343 + 642.901 = $2,914 Mil.
Gross Profit was 419.315 + 488.773 + 407.678 + 354.434 = $1,670 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(5283.552 + 5440.734 + 5486.851 + 5538.664 + 5301.572) / 5 = $5410.2746 Mil.
Total Assets at the begining of this year (Sep13) was $5,284 Mil.
Long-Term Debt was $748 Mil.
Total Current Assets was $4,369 Mil.
Total Current Liabilities was $805 Mil.
Net Income was 106.63 + 166.382 + 134.77 + 111.197 = $519 Mil.

Revenue was 673.011 + 729.029 + 720.032 + 658.337 = $2,780 Mil.
Gross Profit was 369.096 + 419.521 + 413.228 + 380.68 = $1,583 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(5065.476 + 5068.763 + 5194.473 + 5287.357 + 5283.552) / 5 = $5179.9242 Mil.
Total Assets at the begining of last year (Sep12) was $5,065 Mil.
Long-Term Debt was $748 Mil.
Total Current Assets was $4,355 Mil.
Total Current Liabilities was $835 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.

KLA-Tencor Corp's current net income (TTM) was 544. ==> 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.

KLA-Tencor Corp's current cash flow from operations (TTM) was 637. ==> 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)/Total Assets at the Beginning of This Year (Sep13)
=543.791/5283.552
=0.10292148

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=518.979/5065.476
=0.10245414

KLA-Tencor Corp's return on assets of this year was 0.10292148. KLA-Tencor Corp's return on assets of last year was 0.10245414. ==> 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.

KLA-Tencor Corp's current net income (TTM) was 544. KLA-Tencor Corp's current cash flow from operations (TTM) was 637. ==> 637 > 544 ==> 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
=748.054/5410.2746
=0.13826544

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=747.511/5179.9242
=0.14430925

KLA-Tencor Corp's gearing of this year was 0.13826544. KLA-Tencor Corp's gearing of last year was 0.14430925. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=4368.537/804.837
=5.42785309

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=4354.738/835.11
=5.21456814

KLA-Tencor Corp's current ratio of this year was 5.42785309. KLA-Tencor Corp's current ratio of last year was 5.21456814. ==> 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.

KLA-Tencor Corp's number of shares in issue this year was 166.6. KLA-Tencor Corp's number of shares in issue last year was 168.7. ==> 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: TTM)=Gross Profit/Revenue
=1670.2/2913.972
=0.57316954

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1582.525/2780.409
=0.56916986

KLA-Tencor Corp's gross margin of this year was 0.57316954. KLA-Tencor Corp's gross margin of last year was 0.56916986. ==> 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 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 (Sep13)
=2913.972/5283.552
=0.55151762

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=2780.409/5065.476
=0.54889392

KLA-Tencor Corp's asset turnover of this year was 0.55151762. KLA-Tencor Corp's asset turnover of last year was 0.54889392. ==> 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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

KLA-Tencor Corp 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.

KLA-Tencor Corp Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Q1 1111011111
Q2 1111111111
Q3 1010011001
Q4 1011111111
Q5 1110001111
Q6 1100101111
Q7 1011101111
Q8 1010011001
Q9 1010011000
F-score 9484469668

KLA-Tencor Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 0000000011
Q4 1111111111
Q5 1111111111
Q6 1111100011
Q7 1111111111
Q8 0000001111
Q9 0000000001
F-score 6666656689
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