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Valassis Communications Inc (NYSE:VCI)
Piotroski F-Score
0 (As of Today)

The zones of discrimination were as such:

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

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

VCI' s 10-Year Piotroski F-Score Range
Min: 0   Max: 0
Current: 0


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 (Sep13) TTM:Last Year (Sep12) TTM:
Net Income was 27.713 + 26.786 + 21.669 + 34.117 = $110 Mil.
Cash Flow from Operations was 22.402 + 59.969 + 23.45 + 34.845 = $141 Mil.
Revenue was 489.383 + 495.887 + 482.522 + 579.439 = $2,047 Mil.
Gross Profit was 128.046 + 131.344 + 121.754 + 150.205 = $531 Mil.
Total Assets at the begining of this year (Sep12) was $1,575 Mil.
Total Assets was $1,529 Mil.
Long-Term Debt was $503 Mil.
Total Current Assets was $569 Mil.
Total Current Liabilities was $432 Mil.
Net Income was 36.74 + 21.707 + 26.421 + 34.273 = $119 Mil.

Revenue was 523.822 + 540.238 + 518.585 + 595.337 = $2,178 Mil.
Gross Profit was 135.538 + 136.511 + 129.691 + 147.411 = $549 Mil.
Total Assets at the begining of last year (Sep11) was $1,632 Mil.
Total Assets was $1,575 Mil.
Long-Term Debt was $573 Mil.
Total Current Assets was $577 Mil.
Total Current Liabilities was $426 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.

Valassis Communications Inc's current net income was 110. ==> 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.

Valassis Communications Inc's current cash flow from operations was 141. ==> 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 (Sep12)
=110.285/1574.565
=0.07004157

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Sep11)
=119.141/1632.448
=0.07298303

Valassis Communications Inc's return on assets of this year was 0.07004157. Valassis Communications Inc's return on assets of last year was 0.07298303. ==> Last year is higher ==> Score 0.

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.

Valassis Communications Inc's current net income was 110. Valassis Communications Inc's current cash flow from operations was 141. ==> 141 > 110 ==> 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
=502.65/1528.702
=0.32880836

Gearing (Last Year)=Long-Term Debt/Total Assets
=572.561/1574.565
=0.36363123

Valassis Communications Inc's gearing of this year was 0.32880836. Valassis Communications Inc's gearing of last year was 0.36363123. ==> 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)=Total Current Assets/Total Current Liabilities
=569.018/432.32
=1.31619634

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=576.625/425.783
=1.35426966

Valassis Communications Inc's current ratio of this year was 1.31619634. Valassis Communications Inc's current ratio of last year was 1.35426966. ==> 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.

Valassis Communications Inc's number of shares in issue this year was 38.7. Valassis Communications Inc's number of shares in issue last year was 40.8. ==> 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)=Gross Profit/Revenue
=531.349/2047.231
=0.25954521

Gross Margin (Last Year)=Gross Profit/Revenue
=549.151/2177.982
=0.25213753

Valassis Communications Inc's gross margin of this year was 0.25954521. Valassis Communications Inc's gross margin of last year was 0.25213753. ==> This year's gross margin is higher. ==> Score 1.

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 (Sep12)
=2047.231/1574.565
=1.30018831

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Sep11)
=2177.982/1632.448
=1.33418155

Valassis Communications Inc's asset turnover of this year was 1.30018831. Valassis Communications Inc's asset turnover of last year was 1.33418155. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+0+1+1+0
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Valassis Communications Inc 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.

Valassis Communications Inc Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
Q1 1111101111
Q2 1111111111
Q3 1000001101
Q4 1010111111
Q5 1101001111
Q6 0101001101
Q7 1111100011
Q8 0000001101
Q9 1010101101
F-score 7555528859

Valassis Communications Inc Quarterly Data

Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13
Q1 1111111111
Q2 1111111111
Q3 0001111110
Q4 1111111111
Q5 1111001111
Q6 0000011000
Q7 1111111111
Q8 0000001111
Q9 0001011110
F-score 5557579886
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