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MWI Veterinary Supply Inc (NAS:MWIV)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

MWI Veterinary Supply Inc has an F-score of 3 indicating the company's financial situation is typical for a stable company.

MWIV' s 10-Year Piotroski F-Score Range
Min: 3   Max: 6
Current: 3

3
6

During the past 13 years, the highest Piotroski F-Score of MWI Veterinary Supply Inc was 6. The lowest was 3. 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 18.439 + 14.217 + 16.781 + 15.1 = $65 Mil.
Cash Flow from Operations was -10.673 + -3.021 + 54.699 + -9.798 = $31 Mil.
Revenue was 687.259 + 605.08 + 606.443 + 563.114 = $2,462 Mil.
Gross Profit was 89.088 + 75.219 + 77.511 + 74.679 = $316 Mil.
Total Assets at the begining of this year (Dec12) was $734 Mil.
Total Assets was $939 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $766 Mil.
Total Current Liabilities was $480 Mil.
Net Income was 16.751 + 12.6 + 14.503 + 13.178 = $57 Mil.

Revenue was 572.848 + 551.406 + 554.669 + 507.17 = $2,186 Mil.
Gross Profit was 76.929 + 68.265 + 69.519 + 66.618 = $281 Mil.
Total Assets at the begining of last year (Dec11) was $623 Mil.
Total Assets was $734 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $575 Mil.
Total Current Liabilities was $346 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.

MWI Veterinary Supply Inc's current net income was 65. ==> 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.

MWI Veterinary Supply Inc's current cash flow from operations was 31. ==> 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 (Dec12)
=64.537/733.545
=0.08797961

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=57.032/623.446
=0.09147865

MWI Veterinary Supply Inc's return on assets of this year was 0.08797961. MWI Veterinary Supply Inc's return on assets of last year was 0.09147865. ==> Last year is higher ==> Score 0.

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.

MWI Veterinary Supply Inc's current net income was 65. MWI Veterinary Supply Inc's current cash flow from operations was 31. ==> 31 =< 65 ==> CFROA =< ROA ==> Score 0.

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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=0.009/938.914
=9.59E-6

Gearing (Last Year)=Long-Term Debt/Total Assets
=0.07/733.545
=9.543E-5

MWI Veterinary Supply Inc's gearing of this year was 9.59E-6. MWI Veterinary Supply Inc's gearing of last year was 9.543E-5. ==> This year is lower. ==> 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
=766.42/479.666
=1.59782015

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=574.74/345.955
=1.66131433

MWI Veterinary Supply Inc's current ratio of this year was 1.59782015. MWI Veterinary Supply Inc's current ratio of last year was 1.66131433. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

MWI Veterinary Supply Inc's number of shares in issue this year was 12.7. MWI Veterinary Supply Inc's number of shares in issue last year was 12.7. ==> There is more 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)=Gross Profit/Revenue
=316.497/2461.896
=0.12855823

Gross Margin (Last Year)=Gross Profit/Revenue
=281.331/2186.093
=0.12869123

MWI Veterinary Supply Inc's gross margin of this year was 0.12855823. MWI Veterinary Supply Inc's gross margin of last year was 0.12869123. ==> Last year's gross margin is higher ==> Score 0.

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 (Dec12)
=2461.896/733.545
=3.3561622

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=2186.093/623.446
=3.50646728

MWI Veterinary Supply Inc's asset turnover of this year was 3.3561622. MWI Veterinary Supply Inc's asset turnover of last year was 3.50646728. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+0+1+0+0+0+0
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

MWI Veterinary Supply Inc has an F-score of 3 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.

MWI Veterinary Supply Inc Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Q1 1111111111
Q2 0001111111
Q3 0110111010
Q4 0000000000
Q5 0111110111
Q6 1111010101
Q7 0000000000
Q8 1010000001
Q9 1100101010
F-score 4554554455

MWI Veterinary Supply Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 0011100000
Q4 0100000100
Q5 1111111111
Q6 1000011110
Q7 0000000000
Q8 0000000110
Q9 0011100000
F-score 4455544653
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