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Vulcan Materials Company (NYSE:VMC)
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 = 8 or 9
Bad or low score = 0 or 1

Vulcan Materials Company has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

VMC' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 8

3
8

During the past 13 years, the highest Piotroski F-Score of Vulcan Materials Company 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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 9.082 + 41.363 + 28.772 + -54.836 = $24 Mil.
Cash Flow from Operations was 96.487 + 305.357 + -32.478 + -12.867 = $356 Mil.
Revenue was 680.246 + 813.568 + 738.733 + 538.162 = $2,771 Mil.
Gross Profit was 117.347 + 158.983 + 132.895 + 17.655 = $427 Mil.
Total Assets at the begining of this year (Dec12) was $8,127 Mil.
Total Assets was $8,259 Mil.
Long-Term Debt was $2,522 Mil.
Total Current Assets was $951 Mil.
Total Current Liabilities was $299 Mil.
Net Income was 3.483 + 14.26 + -18.283 + -52.053 = $-53 Mil.

Revenue was 608.431 + 728.861 + 694.136 + 535.882 = $2,567 Mil.
Gross Profit was 79.206 + 126.923 + 105.939 + 21.958 = $334 Mil.
Total Assets at the begining of last year (Dec11) was $8,229 Mil.
Total Assets was $8,127 Mil.
Long-Term Debt was $2,526 Mil.
Total Current Assets was $985 Mil.
Total Current Liabilities was $436 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.

Vulcan Materials Company's current net income was 24. ==> 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.

Vulcan Materials Company's current cash flow from operations was 356. ==> 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 (Dec12)
=24.381/8126.599
=0.00300015

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=-52.593/8229.314
=-0.00639093

Vulcan Materials Company's return on assets of this year was 0.00300015. Vulcan Materials Company's return on assets of last year was -0.00639093. ==> 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.

Vulcan Materials Company's current net income was 24. Vulcan Materials Company's current cash flow from operations was 356. ==> 356 > 24 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=2522.243/8259.143
=0.30538798

Gearing (Last Year)=Long-Term Debt/Total Assets
=2526.401/8126.599
=0.31088048

Vulcan Materials Company's gearing of this year was 0.30538798. Vulcan Materials Company's gearing of last year was 0.31088048. ==> This year is lower. ==> 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
=951.496/299.135
=3.18082471

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=984.972/436.411
=2.25698252

Vulcan Materials Company's current ratio of this year was 3.18082471. Vulcan Materials Company's current ratio of last year was 2.25698252. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Vulcan Materials Company's number of shares in issue this year was 131.8. Vulcan Materials Company's number of shares in issue last year was 130. ==> There is more number of shares in issue this year. ==> Score 0.

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
=426.88/2770.709
=0.15406887

Gross Margin (Last Year)=Gross Profit/Revenue
=334.026/2567.31
=0.13010739

Vulcan Materials Company's gross margin of this year was 0.15406887. Vulcan Materials Company's gross margin of last year was 0.13010739. ==> 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 (Dec12)
=2770.709/8126.599
=0.34094324

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=2567.31/8229.314
=0.31197133

Vulcan Materials Company's asset turnover of this year was 0.34094324. Vulcan Materials Company's asset turnover of last year was 0.31197133. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+1+0+1+1
=8

Good or high score = 8 or 9

Bad or low score = 0 or 1

Vulcan Materials Company 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.

Vulcan Materials Company Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111110001
Q2 1111111111
Q3 1111010111
Q4 1111111111
Q5 1100000011
Q6 1000111111
Q7 0011000000
Q8 0111000011
Q9 1111000111
F-score 7777453578

Vulcan Materials Company Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 0000000011
Q2 1111111111
Q3 0111111111
Q4 1111111111
Q5 0001111011
Q6 1110011111
Q7 0000000000
Q8 0011111111
Q9 1111110111
F-score 4566676688
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