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Valspar Corp (NYSE:VAL)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

Valspar Corp has an F-score of 6 indicating the company's financial situation is typical for a stable company.

VAL' s 10-Year Piotroski F-Score Range
Min: 4   Max: 7
Current: 6

4
7

During the past 13 years, the highest Piotroski F-Score of Valspar Corp was 7. The lowest was 4. 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 (Oct14) TTM:Last Year (Oct13) TTM:
Net Income was 53.553 + 85.959 + 97.833 + 108.056 = $345 Mil.
Cash Flow from Operations was 9.317 + -20.044 + 162.185 + 0 = $151 Mil.
Revenue was 956.119 + 1130.178 + 1203.062 + 1233.065 = $4,522 Mil.
Gross Profit was 319.053 + 380.758 + 416.692 + 422.543 = $1,539 Mil.
Average Total Assets from the begining of this year (Oct13)
to the end of this year (Oct14) was
(4025.509 + 3982.564 + 4092.162 + 4179.798 + 4033.951) / 5 = $4,063 Mil.
Total Assets as of Oct13 was $4,026 Mil.
Long-Term Debt was $950 Mil.
Total Current Assets was $1,577 Mil.
Total Current Liabilities was $1,704 Mil.
Net Income was 55.029 + 76.908 + 93.808 + 63.51 = $289 Mil.

Revenue was 875.242 + 1031.219 + 1089.013 + 1108.302 = $4,104 Mil.
Gross Profit was 294.351 + 338.553 + 369.361 + 355.793 = $1,358 Mil.
Average Total Assets from the begining of last year (Oct12)
to the end of last year (Oct13) was
(3626.836 + 3630.667 + 3747.631 + 3843.515 + 4025.509) / 5 = $3,775 Mil.
Total Assets as of Oct12 was $3,627 Mil.
Long-Term Debt was $1,037 Mil.
Total Current Assets was $1,580 Mil.
Total Current Liabilities was $1,481 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Valspar Corp's current net income (ttm) was 345. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

Valspar Corp's current cash flow from operations (ttm) was 151. ==> 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 (TTM)/Beginning of This Year Total Assets (Oct13)
=345.401/4025.509
=0.08580306

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Oct12)
=289.255/3626.836
=0.07975409

Valspar Corp's return on assets of this year was 0.08580306. Valspar Corp's return on assets of last year was 0.07975409. ==> 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.

Valspar Corp's current net income (ttm) was 345. Valspar Corp's current cash flow from operations (ttm) was 151. ==> 151 =< 345 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=950.035/4062.7968
=0.23383769

Gearing (Last Year: Oct13)=Long-Term Debt/Average Total Assets from Oct12 to Oct13
=1037.392/3774.8316
=0.27481809

Valspar Corp's gearing of this year was 0.23383769. Valspar Corp's gearing of last year was 0.27481809. ==> This year is lower or equal to last year. ==> 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: Oct14)=Total Current Assets/Total Current Liabilities
=1577.257/1704.421
=0.92539167

Current Ratio (Last Year: Oct13)=Total Current Assets/Total Current Liabilities
=1580.29/1480.573
=1.06735028

Valspar Corp's current ratio of this year was 0.92539167. Valspar Corp's current ratio of last year was 1.06735028. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Valspar Corp's number of shares in issue this year was 84.6. Valspar Corp's number of shares in issue last year was 88.6. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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: TTM)=Gross Profit/Revenue
=1539.046/4522.424
=0.3403144

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1358.058/4103.776
=0.33092888

Valspar Corp's gross margin of this year was 0.3403144. Valspar Corp's gross margin of last year was 0.33092888. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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)/Beginning of This Year Total Assets (Oct13)
=4522.424/4025.509
=1.12344153

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Oct12)
=4103.776/3626.836
=1.13150305

Valspar Corp's asset turnover of this year was 1.12344153. Valspar Corp's asset turnover of last year was 1.13150305. ==> 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+0+1+0+1+1+0
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Valspar Corp has an F-score of 6 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, Altman Z-Score, Beneish M-Score


Historical Data

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

Valspar Corp Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
Q1 1111110111
Q2 1111111110
Q3 0100110101
Q4 1111111110
Q5 0100001011
Q6 1011100100
Q7 1111011011
Q8 0100100101
Q9 1100011100
F-score 6855665755

Valspar Corp Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Q1 0111111111
Q2 1111111111
Q3 0111100001
Q4 1111111110
Q5 0011111011
Q6 1100000000
Q7 1011111111
Q8 1111100011
Q9 0111101110
F-score 5788856576
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