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Verisk Analytics Inc (NAS:VRSK)
Piotroski F-Score
4 (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

Verisk Analytics Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

VRSK' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 7
Current: 4

4
7

During the past 10 years, the highest Piotroski F-Score of Verisk Analytics Inc was 7. The lowest was 4. 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 local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Net Income was 113.78 + 92.639 + 261.736 + 127.577 = $596 Mil.
Cash Flow from Operations was 103.656 + 303.879 + 74.606 + 85.186 = $567 Mil.
Revenue was 477.4 + 492.701 + 498.296 + 498.081 = $1,966 Mil.
Gross Profit was 316.698 + 319.424 + 319.83 + 328.416 = $1,284 Mil.
Average Total Assets from the begining of this year (Sep15)
to the end of this year (Sep16) was
(5619.097 + 5593.7 + 5459.147 + 4725.063 + 4685.051) / 5 = $5216.4116 Mil.
Total Assets at the begining of this year (Sep15) was $5,619 Mil.
Long-Term Debt was $2,279 Mil.
Total Current Assets was $464 Mil.
Total Current Liabilities was $556 Mil.
Net Income was 97.328 + 98.686 + 163.32 + 131.814 = $491 Mil.

Revenue was 149.238 + 384.293 + 428.599 + 470.408 = $1,433 Mil.
Gross Profit was 156.254 + 250.509 + 273.96 + 307.534 = $988 Mil.
Average Total Assets from the begining of last year (Sep14)
to the end of last year (Sep15) was
(2677.7 + 2345.33 + 2404.499 + 5775.663 + 5619.097) / 5 = $3764.4578 Mil.
Total Assets at the begining of last year (Sep14) was $2,678 Mil.
Long-Term Debt was $2,293 Mil.
Total Current Assets was $618 Mil.
Total Current Liabilities was $1,541 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.

Verisk Analytics Inc's current net income (TTM) was 596. ==> 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.

Verisk Analytics Inc's current cash flow from operations (TTM) was 567. ==> 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.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Sep15)
=595.732/5619.097
=0.10601917

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=491.148/2677.7
=0.18342159

Verisk Analytics Inc's return on assets of this year was 0.10601917. Verisk Analytics Inc's return on assets of last year was 0.18342159. ==> 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.

Verisk Analytics Inc's current net income (TTM) was 596. Verisk Analytics Inc's current cash flow from operations (TTM) was 567. ==> 567 <= 596 ==> CFROA <= ROA ==> Score 0.

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: Sep16)=Long-Term Debt/Average Total Assets from Sep15 to Sep16
=2279.443/5216.4116
=0.4369753

Gearing (Last Year: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=2292.892/3764.4578
=0.60908957

Verisk Analytics Inc's gearing of this year was 0.4369753. Verisk Analytics Inc's gearing of last year was 0.60908957. ==> 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: Sep16)=Total Current Assets/Total Current Liabilities
=464.301/556.49
=0.83433844

Current Ratio (Last Year: Sep15)=Total Current Assets/Total Current Liabilities
=617.762/1540.758
=0.40094681

Verisk Analytics Inc's current ratio of this year was 0.83433844. Verisk Analytics Inc's current ratio of last year was 0.40094681. ==> 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.

Verisk Analytics Inc's number of shares in issue this year was 171.8. Verisk Analytics Inc's number of shares in issue last year was 172.2. ==> 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
=1284.368/1966.478
=0.65313113

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=988.257/1432.538
=0.68986442

Verisk Analytics Inc's gross margin of this year was 0.65313113. Verisk Analytics Inc's gross margin of last year was 0.68986442. ==> Last year's gross margin is higher ==> Score 0.

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 (Sep15)
=1966.478/5619.097
=0.34996335

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep14)
=1432.538/2677.7
=0.53498824

Verisk Analytics Inc's asset turnover of this year was 0.34996335. Verisk Analytics Inc's asset turnover of last year was 0.53498824. ==> 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+0+1+1+1+0+0
=5

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

Verisk Analytics Inc has an F-score of 5 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 local exchange's currency.

Verisk Analytics Inc Annual Data

Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 1111111
Question 2 1111111
Question 3 1000110
Question 4 1111110
Question 5 1011101
Question 6 0101001
Question 7 0110110
Question 8 1110110
Question 9 1000010
F-score 7665774

Verisk Analytics Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 1101111000
Question 4 1111111100
Question 5 1110000111
Question 6 1000000111
Question 7 1111010010
Question 8 0111110000
Question 9 1000011000
F-score 8766575554
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