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Monster Beverage Corp (NAS:MNST)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Monster Beverage Corp has an F-score of 4 indicating the company's financial situation is typical for a stable company.

MNST' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 4

2
9

During the past 13 years, the highest Piotroski F-Score of Monster Beverage Corp was 9. The lowest was 2. 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 (Mar15) TTM:Last Year (Mar14) TTM:
Net Income was 141.003 + 121.6 + 125.331 + 4.414 = $392 Mil.
Cash Flow from Operations was 122.575 + 148.072 + 178.518 + -81.755 = $367 Mil.
Revenue was 687.199 + 635.972 + 605.566 + 626.791 = $2,556 Mil.
Gross Profit was 379.288 + 341.92 + 331.783 + 368.957 = $1,422 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(1593.583 + 1769.019 + 1862.878 + 1938.875 + 2084.946) / 5 = $1849.8602 Mil.
Total Assets at the begining of this year (Mar14) was $1,594 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,842 Mil.
Total Current Liabilities was $549 Mil.
Net Income was 106.873 + 92.187 + 76.106 + 95.25 = $370 Mil.

Revenue was 630.934 + 590.422 + 540.849 + 536.129 = $2,298 Mil.
Gross Profit was 336.262 + 307.47 + 277.161 + 286.818 = $1,208 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(1147.372 + 1317.842 + 1511.867 + 1420.509 + 1593.583) / 5 = $1398.2346 Mil.
Total Assets at the begining of last year (Mar13) was $1,147 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,355 Mil.
Total Current Liabilities was $380 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.

Monster Beverage Corp's current net income (TTM) was 392. ==> 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.

Monster Beverage Corp's current cash flow from operations (TTM) was 367. ==> 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)
=392.348/1593.583
=0.24620494

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=370.416/1147.372
=0.32283863

Monster Beverage Corp's return on assets of this year was 0.24620494. Monster Beverage Corp's return on assets of last year was 0.32283863. ==> Last year is higher ==> Score 0.

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.

Monster Beverage Corp's current net income (TTM) was 392. Monster Beverage Corp's current cash flow from operations (TTM) was 367. ==> 367 <= 392 ==> CFROA <= ROA ==> Score 0.

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
=0/1849.8602
=0

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=0/1398.2346
=0

Monster Beverage Corp's gearing of this year was 0. Monster Beverage Corp's gearing of last year was 0. ==> This year is lower or equal to last year. ==> Score 1.

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
=1841.895/549.287
=3.35324703

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=1355.213/380.366
=3.56291835

Monster Beverage Corp's current ratio of this year was 3.35324703. Monster Beverage Corp's current ratio of last year was 3.56291835. ==> Last year's current ratio is higher ==> Score 0.

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.

Monster Beverage Corp's number of shares in issue this year was 173.8. Monster Beverage Corp's number of shares in issue last year was 173.7. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=1421.948/2555.528
=0.55642043

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1207.711/2298.334
=0.52547236

Monster Beverage Corp's gross margin of this year was 0.55642043. Monster Beverage Corp's gross margin of last year was 0.52547236. ==> 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)
=2555.528/1593.583
=1.60363658

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=2298.334/1147.372
=2.00312889

Monster Beverage Corp's asset turnover of this year was 1.60363658. Monster Beverage Corp's asset turnover of last year was 2.00312889. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+0+1+0+0+1+0
=4

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Monster Beverage Corp has an F-score of 4 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


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Monster Beverage Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1000100011
Question 4 0001011011
Question 5 1111111111
Question 6 1100100011
Question 7 0001110110
Question 8 1001101011
Question 9 1000010010
F-score 7436765497

Monster Beverage Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 1111111111
Question 3 0000111110
Question 4 0001111110
Question 5 1111111111
Question 6 0000111110
Question 7 1111100000
Question 8 0001111111
Question 9 0001111000
F-score 4447988774
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