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Thermo Fisher Scientific Inc (NYSE:TMO)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, 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

Thermo Fisher Scientific Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

TMO' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of Thermo Fisher Scientific Inc 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 (Sep15) TTM:Last Year (Sep14) TTM:
Net Income was 601.2 + 385.1 + 511.6 + 476.1 = $1,974 Mil.
Cash Flow from Operations was 953.7 + 80 + 764.9 + 743.9 = $2,543 Mil.
Revenue was 4492.8 + 3918.8 + 4270.9 + 4123.2 = $16,806 Mil.
Gross Profit was 2091.9 + 1822.5 + 1941.8 + 1883.3 = $7,740 Mil.
Average Total Assets from the begining of this year (Sep14)
to the end of this year (Sep15) was
(42690.8 + 42852.1 + 41857.3 + 41774.4 + 41147.1) / 5 = $42064.34 Mil.
Total Assets at the begining of this year (Sep14) was $42,691 Mil.
Long-Term Debt was $10,278 Mil.
Total Current Assets was $6,026 Mil.
Total Current Liabilities was $5,735 Mil.
Net Income was 342.1 + 543.1 + 278.5 + 471.6 = $1,635 Mil.

Revenue was 3466.9 + 3903.5 + 4321.9 + 4171.4 = $15,864 Mil.
Gross Profit was 1481.7 + 1620 + 1846.5 + 1933.6 = $6,882 Mil.
Average Total Assets from the begining of last year (Sep13)
to the end of last year (Sep14) was
(28272.5 + 31863.4 + 46133.7 + 44313.4 + 42690.8) / 5 = $38654.76 Mil.
Total Assets at the begining of last year (Sep13) was $28,273 Mil.
Long-Term Debt was $11,389 Mil.
Total Current Assets was $5,720 Mil.
Total Current Liabilities was $6,222 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.

Thermo Fisher Scientific Inc's current net income (TTM) was 1,974. ==> 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.

Thermo Fisher Scientific Inc's current cash flow from operations (TTM) was 2,543. ==> 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 (Sep14)
=1974/42690.8
=0.04623947

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=1635.3/28272.5
=0.05784066

Thermo Fisher Scientific Inc's return on assets of this year was 0.04623947. Thermo Fisher Scientific Inc's return on assets of last year was 0.05784066. ==> 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.

Thermo Fisher Scientific Inc's current net income (TTM) was 1,974. Thermo Fisher Scientific Inc's current cash flow from operations (TTM) was 2,543. ==> 2,543 > 1,974 ==> 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: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=10277.9/42064.34
=0.2443376

Gearing (Last Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=11388.6/38654.76
=0.29462348

Thermo Fisher Scientific Inc's gearing of this year was 0.2443376. Thermo Fisher Scientific Inc's gearing of last year was 0.29462348. ==> 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: Sep15)=Total Current Assets/Total Current Liabilities
=6025.9/5735.1
=1.05070531

Current Ratio (Last Year: Sep14)=Total Current Assets/Total Current Liabilities
=5719.9/6222.1
=0.9192877

Thermo Fisher Scientific Inc's current ratio of this year was 1.05070531. Thermo Fisher Scientific Inc's current ratio of last year was 0.9192877. ==> This year's current ratio is higher. ==> Score 1.

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.

Thermo Fisher Scientific Inc's number of shares in issue this year was 402. Thermo Fisher Scientific Inc's number of shares in issue last year was 403.7. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=7739.5/16805.7
=0.46052827

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=6881.8/15863.7
=0.433808

Thermo Fisher Scientific Inc's gross margin of this year was 0.46052827. Thermo Fisher Scientific Inc's gross margin of last year was 0.433808. ==> 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 (Sep14)
=16805.7/42690.8
=0.39366093

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=15863.7/28272.5
=0.56110001

Thermo Fisher Scientific Inc's asset turnover of this year was 0.39366093. Thermo Fisher Scientific Inc's asset turnover of last year was 0.56110001. ==> 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+1+1+1+0
=7

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

Thermo Fisher Scientific Inc has an F-score of 7. 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.

Thermo Fisher Scientific Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 0010110110
Question 4 1111111111
Question 5 0110100011
Question 6 0110001101
Question 7 0011111101
Question 8 0010111011
Question 9 1010110110
F-score 4594876777

Thermo Fisher Scientific Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 1111110000
Question 4 1111111111
Question 5 1000011111
Question 6 1100000111
Question 7 0100000111
Question 8 0001111111
Question 9 1111110000
F-score 7756675777
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