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Telefonica SA (NYSE:TEF)
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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

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

TEF' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 3

3
8

During the past 13 years, the highest Piotroski F-Score of Telefonica SA was 8. 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 (Dec14) TTM:Last Year (Dec13) TTM:
Net Income was 957.123098202 + 1645.38043478 + 1219.07216495 + 187.422934649 = $4,009 Mil.
Cash Flow from Operations was 0 + 7584.23913043 + 0 + 15034.5252774 = $22,619 Mil.
Revenue was 17142.461964 + 18008.1521739 + 17030.9278351 + 16732.4290999 = $68,914 Mil.
Gross Profit was 12190.8713693 + 13001.3586957 + 12087.628866 + 11700.3699137 = $48,980 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(163048.010974 + 155134.163209 + 159563.858696 + 155238.402062 + 150800.246609) / 5 = $156756.93631 Mil.
Total Assets at the begining of this year (Dec13) was $163,048 Mil.
Long-Term Debt was $62,501 Mil.
Total Current Assets was $28,192 Mil.
Total Current Liabilities was $36,620 Mil.
Net Income was 1168.39378238 + 1522.42744063 + 1453.93858478 + 1986.28257888 = $6,131 Mil.

Revenue was 18554.4041451 + 19846.9656992 + 19022.6969292 + 21329.218107 = $78,753 Mil.
Gross Profit was 13129.5336788 + 14236.1477573 + 13411.2149533 + 15297.6680384 = $56,075 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(170305.774278 + 164084.196891 + 159873.350923 + 161806.408545 + 163048.010974) / 5 = $163823.548322 Mil.
Total Assets at the begining of last year (Dec12) was $170,306 Mil.
Long-Term Debt was $70,195 Mil.
Total Current Assets was $40,144 Mil.
Total Current Liabilities was $39,978 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.

Telefonica SA's current net income (TTM) was 4,009. ==> 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.

Telefonica SA's current cash flow from operations (TTM) was 22,619. ==> 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 (Dec13)
=4008.99863258/163048.010974
=0.02458784

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=6131.04238667/170305.774278
=0.0360002

Telefonica SA's return on assets of this year was 0.02458784. Telefonica SA's return on assets of last year was 0.0360002. ==> 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.

Telefonica SA's current net income (TTM) was 4,009. Telefonica SA's current cash flow from operations (TTM) was 22,619. ==> 22,619 > 4,009 ==> 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: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=62500.6165228/156756.93631
=0.39871037

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=70194.78738/163823.548322
=0.42847801

Telefonica SA's gearing of this year was 0.39871037. Telefonica SA's gearing of last year was 0.42847801. ==> 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: Dec14)=Total Current Assets/Total Current Liabilities
=28192.3551171/36620.2219482
=0.76985757

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=40144.0329218/39978.0521262
=1.0041518

Telefonica SA's current ratio of this year was 0.76985757. Telefonica SA's current ratio of last year was 1.0041518. ==> 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.

Telefonica SA's number of shares in issue this year was 5040.2. Telefonica SA's number of shares in issue last year was 4553.1. ==> 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
=48980.2288446/68913.9710729
=0.71074454

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=56074.5644277/78753.2848805
=0.71202826

Telefonica SA's gross margin of this year was 0.71074454. Telefonica SA's gross margin of last year was 0.71202826. ==> Last year's gross margin is higher ==> Score 0.

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 (Dec13)
=68913.9710729/163048.010974
=0.42266061

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=78753.2848805/170305.774278
=0.46242287

Telefonica SA's asset turnover of this year was 0.42266061. Telefonica SA's asset turnover of last year was 0.46242287. ==> 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+1+1+0+0+0+0
=4

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

Telefonica SA 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.

Telefonica SA Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1100110010
Question 4 1111111111
Question 5 0011010011
Question 6 1110101110
Question 7 1111111100
Question 8 0010110100
Question 9 0100100000
F-score 6775875664

Telefonica SA Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Question 1 1111111111
Question 2 1111111111
Question 3 1001011110
Question 4 1111111111
Question 5 0010111111
Question 6 1111111110
Question 7 1111000110
Question 8 1111000000
Question 9 0001000000
F-score 8767566663
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