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

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: 3   Max: 8
Current: 6

3
8

During the past 13 years, the highest Piotroski F-Score of 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 (Jan15) TTM:Last Year (Jan14) TTM:
Net Income was 85.959 + 97.833 + 108.056 + 103.974 = $396 Mil.
Cash Flow from Operations was -20.044 + 162.185 + 195.646 + -23.322 = $314 Mil.
Revenue was 1130.178 + 1203.062 + 1233.065 + 1014.669 = $4,581 Mil.
Gross Profit was 380.758 + 416.692 + 422.543 + 333.292 = $1,553 Mil.
Average Total Assets from the begining of this year (Jan14)
to the end of this year (Jan15) was
(3982.564 + 4092.162 + 4179.798 + 4033.951 + 4006.861) / 5 = $4059.0672 Mil.
Total Assets at the begining of this 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.
Net Income was 76.908 + 93.808 + 63.51 + 53.553 = $288 Mil.

Revenue was 1031.219 + 1089.013 + 1108.302 + 979.117 = $4,208 Mil.
Gross Profit was 338.553 + 369.361 + 355.793 + 319.053 = $1,383 Mil.
Average Total Assets from the begining of last year (Jan13)
to the end of last year (Jan14) was
(3630.667 + 3747.631 + 3843.515 + 4025.509 + 3982.564) / 5 = $3845.9772 Mil.
Total Assets at the begining of last year (Jan13) was $3,631 Mil.
Long-Term Debt was $1,012 Mil.
Total Current Assets was $1,528 Mil.
Total Current Liabilities was $1,504 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.

Valspar Corp's current net income (TTM) was 396. ==> 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.

Valspar Corp's current cash flow from operations (TTM) was 314. ==> 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 (Jan14)
=395.822/3982.564
=0.09938874

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=287.779/3630.667
=0.0792634

Valspar Corp's return on assets of this year was 0.09938874. Valspar Corp's return on assets of last year was 0.0792634. ==> This year is higher. ==> Score 1.

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.

Valspar Corp's current net income (TTM) was 396. Valspar Corp's current cash flow from operations (TTM) was 314. ==> 314 <= 396 ==> CFROA <= ROA ==> Score 0.

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

Gearing (Last Year: Jan14)=Long-Term Debt/Average Total Assets from Jan13 to Jan14
=1012.354/3845.9772
=0.26322413

Valspar Corp's gearing of this year was 0.33260868. Valspar Corp's gearing of last year was 0.26322413. ==> 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: Jan15)=Total Current Assets/Total Current Liabilities
=1592.898/1336.352
=1.19197487

Current Ratio (Last Year: Jan14)=Total Current Assets/Total Current Liabilities
=1527.85/1504.484
=1.01553091

Valspar Corp's current ratio of this year was 1.19197487. Valspar Corp's current ratio of last year was 1.01553091. ==> 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.

Valspar Corp's number of shares in issue this year was 83.9. Valspar Corp's number of shares in issue last year was 87.6. ==> 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
=1553.285/4580.974
=0.33907309

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1382.76/4207.651
=0.32862992

Valspar Corp's gross margin of this year was 0.33907309. Valspar Corp's gross margin of last year was 0.32862992. ==> 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 (Jan14)
=4580.974/3982.564
=1.15025747

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jan13)
=4207.651/3630.667
=1.15891956

Valspar Corp's asset turnover of this year was 1.15025747. Valspar Corp's asset turnover of last year was 1.15891956. ==> 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+1+0+0+1+1+1+0
=6

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

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.

Valspar Corp Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
Question 1 1111110111
Question 2 1111111111
Question 3 0100110101
Question 4 1111111111
Question 5 0100001011
Question 6 1011100100
Question 7 1111011011
Question 8 0100100101
Question 9 1100011100
F-score 6855665757

Valspar Corp Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
Question 1 1111111111
Question 2 1111111111
Question 3 1111000011
Question 4 1111111110
Question 5 0111110110
Question 6 1000000001
Question 7 0111111111
Question 8 1111000011
Question 9 1111011100
F-score 7888565676
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