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

The zones of discrimination were as such:

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

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

VAL' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 6

3
8

During the past 13 years, the highest Piotroski F-Score of The Valspar Corp 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 (Jan16) TTM:Last Year (Jan15) TTM:
Net Income was 90.314 + 102.862 + 102.356 + 52.431 = $348 Mil.
Cash Flow from Operations was 5.635 + 130.283 + 270.604 + 20.489 = $427 Mil.
Revenue was 1079.289 + 1149.126 + 1149.538 + 885.756 = $4,264 Mil.
Gross Profit was 393.203 + 411.283 + 413.611 + 318.627 = $1,537 Mil.
Average Total Assets from the begining of this year (Jan15)
to the end of this year (Jan16) was
(4006.861 + 3978.86 + 4578.018 + 4318.575 + 4175.241) / 5 = $4211.511 Mil.
Total Assets at the begining of this year (Jan15) was $4,007 Mil.
Long-Term Debt was $1,708 Mil.
Total Current Assets was $1,502 Mil.
Total Current Liabilities was $1,225 Mil.
Net Income was 85.959 + 97.833 + 108.056 + 103.974 = $396 Mil.

Revenue was 1155.826 + 1229.304 + 1261.377 + 1014.669 = $4,661 Mil.
Gross Profit was 380.758 + 416.692 + 422.543 + 333.292 = $1,553 Mil.
Average Total Assets from the begining of last year (Jan14)
to the end of last year (Jan15) was
(3982.564 + 4092.162 + 4179.798 + 4033.951 + 4006.861) / 5 = $4059.0672 Mil.
Total Assets at the begining of last year (Jan14) was $3,983 Mil.
Long-Term Debt was $1,350 Mil.
Total Current Assets was $1,593 Mil.
Total Current Liabilities was $1,336 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.

The Valspar Corp's current net income (TTM) was 348. ==> 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.

The Valspar Corp's current cash flow from operations (TTM) was 427. ==> 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 (Jan15)
=347.963/4006.861
=0.08684179

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan14)
=395.822/3982.564
=0.09938874

The Valspar Corp's return on assets of this year was 0.08684179. The Valspar Corp's return on assets of last year was 0.09938874. ==> 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.

The Valspar Corp's current net income (TTM) was 348. The Valspar Corp's current cash flow from operations (TTM) was 427. ==> 427 > 348 ==> 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: Jan16)=Long-Term Debt/Average Total Assets from Jan15 to Jan16
=1708.431/4211.511
=0.40565749

Gearing (Last Year: Jan15)=Long-Term Debt/Average Total Assets from Jan14 to Jan15
=1350.081/4059.0672
=0.33260868

The Valspar Corp's gearing of this year was 0.40565749. The Valspar Corp's gearing of last year was 0.33260868. ==> Last year is lower than this year ==> Score 0.

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: Jan16)=Total Current Assets/Total Current Liabilities
=1501.722/1225.322
=1.22557336

Current Ratio (Last Year: Jan15)=Total Current Assets/Total Current Liabilities
=1592.898/1336.352
=1.19197487

The Valspar Corp's current ratio of this year was 1.22557336. The Valspar Corp's current ratio of last year was 1.19197487. ==> 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.

The Valspar Corp's number of shares in issue this year was 80.6. The Valspar Corp's number of shares in issue last year was 83.9. ==> 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
=1536.724/4263.709
=0.36041953

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1553.285/4661.176
=0.33323887

The Valspar Corp's gross margin of this year was 0.36041953. The Valspar Corp's gross margin of last year was 0.33323887. ==> 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 (Jan15)
=4263.709/4006.861
=1.06410205

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan14)
=4661.176/3982.564
=1.17039576

The Valspar Corp's asset turnover of this year was 1.06410205. The Valspar Corp's asset turnover of last year was 1.17039576. ==> 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+0+1+1+1+0
=6

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

The 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


Historical Data

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

The Valspar Corp Annual Data

Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14Oct15
Question 1 1111101111
Question 2 1111111111
Question 3 1001101011
Question 4 1111111110
Question 5 1000010110
Question 6 0111001001
Question 7 1110110111
Question 8 1001001011
Question 9 1000111100
F-score 8556657676

The Valspar Corp Quarterly Data

Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16
Question 1 1111111111
Question 2 1111111111
Question 3 0000111110
Question 4 1111100001
Question 5 1101100000
Question 6 0000011111
Question 7 1111111111
Question 8 0000111111
Question 9 1111000000
F-score 6656766666
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