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Wal-Mart Stores Inc (NYSE:WMT)
Piotroski F-Score
6 (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

Wal-Mart Stores Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

WMT' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 9
Current: 6

4
9

During the past 13 years, the highest Piotroski F-Score of Wal-Mart Stores Inc was 9. 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 own currency.

This Year (Jul16) TTM:Last Year (Jul15) TTM:
Net Income was 3304 + 4574 + 3079 + 3773 = $14,730 Mil.
Cash Flow from Operations was 4903 + 12384 + 6193 + 8738 = $32,218 Mil.
Revenue was 117408 + 129667 + 115904 + 120854 = $483,833 Mil.
Gross Profit was 29962 + 32668 + 29360 + 31369 = $123,359 Mil.
Average Total Assets from the begining of this year (Jul15)
to the end of this year (Jul16) was
(198620 + 205144 + 199581 + 198705 + 197886) / 5 = $199987.2 Mil.
Total Assets at the begining of this year (Jul15) was $198,620 Mil.
Long-Term Debt was $42,743 Mil.
Total Current Assets was $58,232 Mil.
Total Current Liabilities was $68,122 Mil.
Net Income was 3711 + 4966 + 3341 + 3475 = $15,493 Mil.

Revenue was 119001 + 131565 + 114826 + 120229 = $485,621 Mil.
Gross Profit was 29754 + 32450 + 28343 + 30173 = $120,720 Mil.
Average Total Assets from the begining of last year (Jul14)
to the end of last year (Jul15) was
(203762 + 207668 + 203490 + 200747 + 198620) / 5 = $202857.4 Mil.
Total Assets at the begining of last year (Jul14) was $203,762 Mil.
Long-Term Debt was $42,843 Mil.
Total Current Assets was $58,132 Mil.
Total Current Liabilities was $65,262 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.

Wal-Mart Stores Inc's current net income (TTM) was 14,730. ==> 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.

Wal-Mart Stores Inc's current cash flow from operations (TTM) was 32,218. ==> 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 (Jul15)
=14730/198620
=0.07416172

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jul14)
=15493/203762
=0.07603479

Wal-Mart Stores Inc's return on assets of this year was 0.07416172. Wal-Mart Stores Inc's return on assets of last year was 0.07603479. ==> 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.

Wal-Mart Stores Inc's current net income (TTM) was 14,730. Wal-Mart Stores Inc's current cash flow from operations (TTM) was 32,218. ==> 32,218 > 14,730 ==> 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: Jul16)=Long-Term Debt/Average Total Assets from Jul15 to Jul16
=42743/199987.2
=0.21372868

Gearing (Last Year: Jul15)=Long-Term Debt/Average Total Assets from Jul14 to Jul15
=42843/202857.4
=0.21119762

Wal-Mart Stores Inc's gearing of this year was 0.21372868. Wal-Mart Stores Inc's gearing of last year was 0.21119762. ==> Last year is lower than this year ==> Score 0.

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: Jul16)=Total Current Assets/Total Current Liabilities
=58232/68122
=0.85481929

Current Ratio (Last Year: Jul15)=Total Current Assets/Total Current Liabilities
=58132/65262
=0.89074806

Wal-Mart Stores Inc's current ratio of this year was 0.85481929. Wal-Mart Stores Inc's current ratio of last year was 0.89074806. ==> Last year's current ratio is higher ==> Score 0.

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.

Wal-Mart Stores Inc's number of shares in issue this year was 3119. Wal-Mart Stores Inc's number of shares in issue last year was 3231. ==> 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
=123359/483833
=0.25496194

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=120720/485621
=0.24858892

Wal-Mart Stores Inc's gross margin of this year was 0.25496194. Wal-Mart Stores Inc's gross margin of last year was 0.24858892. ==> 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 (Jul15)
=483833/198620
=2.43597322

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jul14)
=485621/203762
=2.38327559

Wal-Mart Stores Inc's asset turnover of this year was 2.43597322. Wal-Mart Stores Inc's asset turnover of last year was 2.38327559. ==> 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+0+1+0+0+1+1+1
=6

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

Wal-Mart Stores 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.

Wal-Mart Stores Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
Question 1 1111111111
Question 2 1111111111
Question 3 0101101010
Question 4 1111111111
Question 5 1110001010
Question 6 1010100110
Question 7 1111111111
Question 8 1111000011
Question 9 0001000010
F-score 7777646595

Wal-Mart Stores Inc Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
Question 1 1111111111
Question 2 1111111111
Question 3 0001100000
Question 4 1111111111
Question 5 0011110000
Question 6 1111111000
Question 7 1111111111
Question 8 0001111111
Question 9 0011101011
F-score 5579977566
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