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Telefonica SA (NYSE:TEF)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

Telefonica SA has an F-score of 5 indicating the company's financial situation is typical for a stable company.

TEF' s 10-Year Piotroski F-Score Range
Min: 1   Max: 9
Current: 5

1
9

During the past 13 years, the highest Piotroski F-Score of Telefonica SA was 9. The lowest was 1. 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 955.801104972 + 1972.7520436 + 1485.67530696 + 1510.47120419 = $5,925 Mil.
Cash Flow from Operations was 0 + 10824.2506812 + 0 + 8375.65445026 = $19,200 Mil.
Revenue was 17118.7845304 + 21183.9237057 + 19437.9263302 + 19691.0994764 = $77,432 Mil.
Gross Profit was 17118.7845304 + 15193.4604905 + 13703.9563438 + 8642.67015707 = $54,659 Mil.
Total Assets at the begining of this year (Mar13) was $165,154 Mil.
Total Assets was $154,920 Mil.
Long-Term Debt was $65,500 Mil.
Total Current Assets was $33,271 Mil.
Total Current Liabilities was $36,501 Mil.
Net Income was 1176.01043025 + 628.989361702 + 1789.88326848 + 1630.22113022 = $5,225 Mil.

Revenue was 18675.3585398 + 23376.3297872 + 20394.2931258 + 19899.2628993 = $82,345 Mil.
Gross Profit was 18675.3585398 + 17164.893617 + 14761.3488975 + 14415.2334152 = $65,017 Mil.
Total Assets at the begining of last year (Mar12) was $169,950 Mil.
Total Assets was $165,154 Mil.
Long-Term Debt was $68,671 Mil.
Total Current Assets was $29,449 Mil.
Total Current Liabilities was $40,464 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.

Telefonica SA's current net income was 5,925. ==> 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.

Telefonica SA's current cash flow from operations was 19,200. ==> 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 (Mar13)
=5924.69965972/165153.846154
=0.03587382

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=5225.10419065/169950
=0.03074495

Telefonica SA's return on assets of this year was 0.03587382. Telefonica SA's return on assets of last year was 0.03074495. ==> 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.

Telefonica SA's current net income was 5,925. Telefonica SA's current cash flow from operations was 19,200. ==> 19,200 > 5,925 ==> 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)=Long-Term Debt/Total Assets
=65500/154919.889503
=0.42279917

Gearing (Last Year)=Long-Term Debt/Total Assets
=68671.4471969/165153.846154
=0.41580289

Telefonica SA's gearing of this year was 0.42279917. Telefonica SA's gearing of last year was 0.41580289. ==> 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)=Total Current Assets/Total Current Liabilities
=33270.718232/36501.3812155
=0.91149203

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=29448.5006519/40464.1460235
=0.72776775

Telefonica SA's current ratio of this year was 0.91149203. Telefonica SA's current ratio of last year was 0.72776775. ==> 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.

Telefonica SA's number of shares in issue this year was 4504. Telefonica SA's number of shares in issue last year was 4485. ==> 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)=Gross Profit/Revenue
=54658.8715217/77431.7340427
=0.70589755

Gross Margin (Last Year)=Gross Profit/Revenue
=65016.8344696/82345.2443521
=0.78956393

Telefonica SA's gross margin of this year was 0.70589755. Telefonica SA's gross margin of last year was 0.78956393. ==> 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 (Mar13)
=77431.7340427/165153.846154
=0.46884608

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=82345.2443521/169950
=0.4845263

Telefonica SA's asset turnover of this year was 0.46884608. Telefonica SA's asset turnover of last year was 0.4845263. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+1+0+0+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Telefonica SA has an F-score of 5 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1111011001
Q4 1111111111
Q5 1001011001
Q6 0111010111
Q7 1111111010
Q8 0001011010
Q9 0110010010
F-score 6778497476

Telefonica SA Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 0001001011
Q4 1111111111
Q5 0000011110
Q6 1011111111
Q7 0011111000
Q8 1111111000
Q9 0000001000
F-score 5468676565
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