Switch to:
VMware Inc (NYSE:VMW)
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

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

VMW' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 8

3
8

During the past 12 years, the highest Piotroski F-Score of VMware Inc 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 (Jun16) TTM:Last Year (Jun15) TTM:
Net Income was 256 + 374 + 161 + 265 = $1,056 Mil.
Cash Flow from Operations was 412 + 488 + 720 + 577 = $2,197 Mil.
Revenue was 1672 + 1868 + 1589 + 1693 = $6,822 Mil.
Gross Profit was 1414 + 1601 + 1338 + 1432 = $5,785 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(14853 + 14791 + 15746 + 15836 + 16484) / 5 = $15542 Mil.
Total Assets at the begining of this year (Jun15) was $14,853 Mil.
Long-Term Debt was $1,500 Mil.
Total Current Assets was $10,143 Mil.
Total Current Liabilities was $4,126 Mil.
Net Income was 194 + 326 + 196 + 172 = $888 Mil.

Revenue was 1515 + 1702 + 1511 + 1521 = $6,249 Mil.
Gross Profit was 1273 + 1447 + 1268 + 1271 = $5,259 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(14159 + 14519 + 15216 + 14807 + 14853) / 5 = $14710.8 Mil.
Total Assets at the begining of last year (Jun14) was $14,159 Mil.
Long-Term Debt was $1,500 Mil.
Total Current Assets was $8,712 Mil.
Total Current Liabilities was $3,955 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.

VMware Inc's current net income (TTM) was 1,056. ==> 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.

VMware Inc's current cash flow from operations (TTM) was 2,197. ==> 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.

VMware Inc's return on assets of this year was 0.07109675. VMware Inc's return on assets of last year was 0.06271629. ==> 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.

VMware Inc's current net income (TTM) was 1,056. VMware Inc's current cash flow from operations (TTM) was 2,197. ==> 2,197 > 1,056 ==> 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
=1500/15542
=0.09651268

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=1500/14710.8
=0.1019659

VMware Inc's gearing of this year was 0.09651268. VMware Inc's gearing of last year was 0.1019659. ==> 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
=10143/4126
=2.45831314

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=8712/3955
=2.20278129

VMware Inc's current ratio of this year was 2.45831314. VMware Inc's current ratio of last year was 2.20278129. ==> 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.

VMware Inc's number of shares in issue this year was 427.1. VMware Inc's number of shares in issue last year was 426.8. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=5785/6822
=0.84799179

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=5259/6249
=0.84157465

VMware Inc's gross margin of this year was 0.84799179. VMware Inc's gross margin of last year was 0.84157465. ==> 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)
=6822/14853
=0.45930115

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=6249/14159
=0.44134473

VMware Inc's asset turnover of this year was 0.45930115. VMware Inc's asset turnover of last year was 0.44134473. ==> This year's asset turnover is higher. ==> Score 1.

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+1+1+1+0+1+1
=8

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

VMware Inc 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.

VMware Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 111111111
Question 2 111111111
Question 3 100110100
Question 4 111111111
Question 5 111111101
Question 6 110000101
Question 7 000000101
Question 8 010111100
Question 9 100100000
F-score 764765836

VMware Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1111111111
Question 2 1111111111
Question 3 1100000011
Question 4 1111111111
Question 5 0000111111
Question 6 1100000111
Question 7 0000111110
Question 8 1100000011
Question 9 0000000001
F-score 6633555688
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK