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Valero Energy Corp (NYSE:VLO)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

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 8. It is a good or high score, which usually indicates a very healthy situation.

VLO' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 8

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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 1288 + 828 + 588 + 1059 = $3,763 Mil.
Cash Flow from Operations was 2529 + 244 + 1134 + 1866 = $5,773 Mil.
Revenue was 34429 + 33663 + 34914 + 34408 = $137,414 Mil.
Gross Profit was 2184 + 1931 + 1669 + 2280 = $8,064 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(46293 + 47260 + 47099 + 47013 + 48455) / 5 = $47224 Mil.
Total Assets at the begining of this year (Sep13) was $46,293 Mil.
Long-Term Debt was $5,783 Mil.
Total Current Assets was $19,666 Mil.
Total Current Liabilities was $13,460 Mil.
Net Income was 1010 + 654 + 466 + 312 = $2,442 Mil.

Revenue was 34695 + 33474 + 34034 + 36137 = $138,340 Mil.
Gross Profit was 2233 + 1667 + 1443 + 1150 = $6,493 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(43792 + 44477 + 45501 + 44177 + 46293) / 5 = $44848 Mil.
Total Assets at the begining of last year (Sep12) was $43,792 Mil.
Long-Term Debt was $6,261 Mil.
Total Current Assets was $18,593 Mil.
Total Current Liabilities was $13,668 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.

Valero Energy Corp's current net income (TTM) was 3,763. ==> 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.

Valero Energy Corp's current cash flow from operations (TTM) was 5,773. ==> 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.

Valero Energy Corp's return on assets of this year was 0.08128659. Valero Energy Corp's return on assets of last year was 0.05576361. ==> 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.

Valero Energy Corp's current net income (TTM) was 3,763. Valero Energy Corp's current cash flow from operations (TTM) was 5,773. ==> 5,773 > 3,763 ==> 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: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=5783/47224
=0.12245892

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=6261/44848
=0.13960489

Valero Energy Corp's gearing of this year was 0.12245892. Valero Energy Corp's gearing of last year was 0.13960489. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=19666/13460
=1.46106984

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=18593/13668
=1.3603307

Valero Energy Corp's current ratio of this year was 1.46106984. Valero Energy Corp's current ratio of last year was 1.3603307. ==> This year's current ratio is higher. ==> Score 1.

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.

Valero Energy Corp's number of shares in issue this year was 530. Valero Energy Corp's number of shares in issue last year was 545. ==> 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
=8064/137414
=0.05868398

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=6493/138340
=0.04693509

Valero Energy Corp's gross margin of this year was 0.05868398. Valero Energy Corp's gross margin of last year was 0.04693509. ==> 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 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 (Sep13)
=137414/46293
=2.96835375

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=138340/43792
=3.15902448

Valero Energy Corp's asset turnover of this year was 2.96835375. Valero Energy Corp's asset turnover of last year was 3.15902448. ==> 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+1+1+1+1+1+0
=8

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

Valero Energy Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.


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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111001111
Q2 1111111111
Q3 1100001101
Q4 1111111111
Q5 1110000111
Q6 0010101011
Q7 0001100011
Q8 1110001010
Q9 1100101100
F-score 7764527677

Valero Energy Corp Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 1001111011
Q4 1111111111
Q5 1111111111
Q6 0011111111
Q7 1110111111
Q8 1011100001
Q9 1100000000
F-score 8677877678
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