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Valero Energy Corp (NYSE:VLO)
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

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

VLO' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 6

2
8

During the past 13 years, the highest Piotroski F-Score of Valero Energy Corp was 8. The lowest was 2. And the median was 7.


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 (Jun16) TTM:Last Year (Jun15) TTM:
Net Income was 1377 + 298 + 495 + 814 = $2,984 Mil.
Cash Flow from Operations was 1362 + 487 + 640 + 2319 = $4,808 Mil.
Revenue was 22579 + 18777 + 15714 + 19584 = $76,654 Mil.
Gross Profit was 2800 + 1346 + 1470 + 1917 = $7,533 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(47599 + 45825 + 44343 + 44259 + 45452) / 5 = $45495.6 Mil.
Total Assets at the begining of this year (Jun15) was $47,599 Mil.
Long-Term Debt was $6,646 Mil.
Total Current Assets was $16,180 Mil.
Total Current Liabilities was $8,652 Mil.
Net Income was 1059 + 1155 + 964 + 1351 = $4,529 Mil.

Revenue was 34408 + 27859 + 21330 + 25118 = $108,715 Mil.
Gross Profit was 2280 + 2435 + 2083 + 2681 = $9,479 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(47013 + 48455 + 45550 + 45741 + 47599) / 5 = $46871.6 Mil.
Total Assets at the begining of last year (Jun14) was $47,013 Mil.
Long-Term Debt was $7,199 Mil.
Total Current Assets was $18,492 Mil.
Total Current Liabilities was $9,865 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.

Valero Energy Corp's current net income (TTM) was 2,984. ==> 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.

Valero Energy Corp's current cash flow from operations (TTM) was 4,808. ==> 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.

Valero Energy Corp's return on assets of this year was 0.06269039. Valero Energy Corp's return on assets of last year was 0.09633506. ==> 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.

Valero Energy Corp's current net income (TTM) was 2,984. Valero Energy Corp's current cash flow from operations (TTM) was 4,808. ==> 4,808 > 2,984 ==> 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: Jun16)=Long-Term Debt/Average Total Assets from Jun15 to Jun16
=6646/45495.6
=0.14608006

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=7199/46871.6
=0.15358981

Valero Energy Corp's gearing of this year was 0.14608006. Valero Energy Corp's gearing of last year was 0.15358981. ==> 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: Jun16)=Total Current Assets/Total Current Liabilities
=16180/8652
=1.87008784

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=18492/9865
=1.87450583

Valero Energy Corp's current ratio of this year was 1.87008784. Valero Energy Corp's current ratio of last year was 1.87450583. ==> Last year's current ratio is higher ==> Score 0.

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.

Valero Energy Corp's number of shares in issue this year was 470. Valero Energy Corp's number of shares in issue last year was 508. ==> 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
=7533/76654
=0.09827276

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=9479/108715
=0.08719128

Valero Energy Corp's gross margin of this year was 0.09827276. Valero Energy Corp's gross margin of last year was 0.08719128. ==> 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 (Jun15)
=76654/47599
=1.61041198

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=108715/47013
=2.31244549

Valero Energy Corp's asset turnover of this year was 1.61041198. Valero Energy Corp's asset turnover of last year was 2.31244549. ==> 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+0+1+1+0
=6

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

Valero Energy 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.

Valero Energy Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1100111111
Question 2 1111111111
Question 3 0000110111
Question 4 1111111111
Question 5 1010011110
Question 6 1010101111
Question 7 0110001111
Question 8 1000101011
Question 9 0010110000
F-score 6462767787

Valero Energy Corp Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1111111111
Question 2 1111111111
Question 3 0111111100
Question 4 1111111111
Question 5 1111000001
Question 6 1111111110
Question 7 1111111111
Question 8 0011111111
Question 9 0000000000
F-score 6788777766
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