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Verisk Analytics, Inc. (NAS:VRSK)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Verisk Analytics, Inc. has an F-score of 6 indicating the company's financial situation is typical for a stable company.

VRSK' s 10-Year Piotroski F-Score Range
Min: 5   Max: 7
Current: 6

5
7

During the past 7 years, the highest Piotroski F-Score of Verisk Analytics, Inc. was 7. The lowest was 5. 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 87.223 + 96.441 + 84.205 + 80.511 = $348 Mil.
Cash Flow from Operations was 120.468 + 139.761 + 55.434 + 191.257 = $507 Mil.
Revenue was 332.463 + 438.597 + 421.32 + 403.323 = $1,596 Mil.
Gross Profit was 225.632 + 262.017 + 246.657 + 238.874 = $973 Mil.
Total Assets at the begining of this year (Dec12) was $2,360 Mil.
Total Assets was $2,504 Mil.
Long-Term Debt was $1,271 Mil.
Total Current Assets was $475 Mil.
Total Current Liabilities was $431 Mil.
Net Income was 98.299 + 82.911 + 73.331 + 74.601 = $329 Mil.

Revenue was 289.258 + 398.863 + 373.226 + 346.501 = $1,408 Mil.
Gross Profit was 209.703 + 242.114 + 226.152 + 213.171 = $891 Mil.
Total Assets at the begining of last year (Dec11) was $1,541 Mil.
Total Assets was $2,360 Mil.
Long-Term Debt was $1,266 Mil.
Total Current Assets was $391 Mil.
Total Current Liabilities was $585 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.

Verisk Analytics, Inc.'s current net income was 348. ==> 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.

Verisk Analytics, Inc.'s current cash flow from operations was 507. ==> 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)
=348.38/2360.336
=0.14759763

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=329.142/1541.106
=0.21357519

Verisk Analytics, Inc.'s return on assets of this year was 0.14759763. Verisk Analytics, Inc.'s return on assets of last year was 0.21357519. ==> Last year is higher ==> Score 0.

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.

Verisk Analytics, Inc.'s current net income was 348. Verisk Analytics, Inc.'s current cash flow from operations was 507. ==> 507 > 348 ==> 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
=1271.439/2504.451
=0.50767174

Gearing (Last Year)=Long-Term Debt/Total Assets
=1266.162/2360.336
=0.53643295

Verisk Analytics, Inc.'s gearing of this year was 0.50767174. Verisk Analytics, Inc.'s gearing of last year was 0.53643295. ==> 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
=474.845/431.179
=1.10127117

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=390.559/585.35
=0.66722303

Verisk Analytics, Inc.'s current ratio of this year was 1.10127117. Verisk Analytics, Inc.'s current ratio of last year was 0.66722303. ==> 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.

Verisk Analytics, Inc.'s number of shares in issue this year was 171.7. Verisk Analytics, Inc.'s number of shares in issue last year was 171.9. ==> There is the same number of shares in issue this year, or fewer. ==> 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)=Gross Profit/Revenue
=973.18/1595.703
=0.6098754

Gross Margin (Last Year)=Gross Profit/Revenue
=891.14/1407.848
=0.63298026

Verisk Analytics, Inc.'s gross margin of this year was 0.6098754. Verisk Analytics, Inc.'s gross margin of last year was 0.63298026. ==> Last year's gross margin is higher ==> Score 0.

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)
=1595.703/2360.336
=0.67604909

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=1407.848/1541.106
=0.91353093

Verisk Analytics, Inc.'s asset turnover of this year was 0.67604909. Verisk Analytics, Inc.'s asset turnover of last year was 0.91353093. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+1+1+0+0
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Verisk Analytics, Inc. 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.

Verisk Analytics, Inc. Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 111
Q2 111
Q3 000
Q4 111
Q5 011
Q6 101
Q7 110
Q8 110
Q9 000
F-score 665

Verisk Analytics, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111111111
Q2 1111111111
Q3 1000000000
Q4 1111111111
Q5 0001111111
Q6 0111101111
Q7 1111000001
Q8 1111111110
Q9 1000000000
F-score 7667656666
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