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Wal-Mart Stores Inc (NYSE:WMT)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

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

WMT' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 5

4
8

During the past 13 years, the highest Piotroski F-Score of Wal-Mart Stores Inc was 8. 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 (Jan14) TTM:Last Year (Jan13) TTM:
Net Income was 4431 + 3738 + 4069 + 3784 = $16,022 Mil.
Cash Flow from Operations was 9937 + 2069 + 6357 + 4894 = $23,257 Mil.
Revenue was 129706 + 115688 + 116945 + 114187 = $476,526 Mil.
Gross Profit was 31735 + 29001 + 29490 + 28160 = $118,386 Mil.
Total Assets at the begining of this year (Jan13) was $203,105 Mil.
Total Assets was $204,751 Mil.
Long-Term Debt was $44,559 Mil.
Total Current Assets was $61,185 Mil.
Total Current Liabilities was $69,345 Mil.
Net Income was 5606 + 3635 + 4016 + 3742 = $16,999 Mil.

Revenue was 127776 + 113800 + 114282 + 113010 = $468,868 Mil.
Gross Profit was 31705 + 28330 + 28639 + 27832 = $116,506 Mil.
Total Assets at the begining of last year (Jan12) was $193,406 Mil.
Total Assets was $203,105 Mil.
Long-Term Debt was $41,417 Mil.
Total Current Assets was $59,940 Mil.
Total Current Liabilities was $71,818 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.

Wal-Mart Stores Inc's current net income was 16,022. ==> 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.

Wal-Mart Stores Inc's current cash flow from operations was 23,257. ==> 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 (Jan13)
=16022/203105
=0.07888531

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jan12)
=16999/193406
=0.08789283

Wal-Mart Stores Inc's return on assets of this year was 0.07888531. Wal-Mart Stores Inc's return on assets of last year was 0.08789283. ==> 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.

Wal-Mart Stores Inc's current net income was 16,022. Wal-Mart Stores Inc's current cash flow from operations was 23,257. ==> 23,257 > 16,022 ==> 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
=44559/204751
=0.21762531

Gearing (Last Year)=Long-Term Debt/Total Assets
=41417/203105
=0.20391916

Wal-Mart Stores Inc's gearing of this year was 0.21762531. Wal-Mart Stores Inc's gearing of last year was 0.20391916. ==> Last year is lower ==> Score 0.

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
=61185/69345
=0.88232749

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=59940/71818
=0.83460971

Wal-Mart Stores Inc's current ratio of this year was 0.88232749. Wal-Mart Stores Inc's current ratio of last year was 0.83460971. ==> 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.

Wal-Mart Stores Inc's number of shares in issue this year was 3253. Wal-Mart Stores Inc's number of shares in issue last year was 3356. ==> 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
=118386/476526
=0.24843555

Gross Margin (Last Year)=Gross Profit/Revenue
=116506/468868
=0.24848358

Wal-Mart Stores Inc's gross margin of this year was 0.24843555. Wal-Mart Stores Inc's gross margin of last year was 0.24848358. ==> 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 (Jan13)
=476526/203105
=2.34620516

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jan12)
=468868/193406
=2.42426812

Wal-Mart Stores Inc's asset turnover of this year was 2.34620516. Wal-Mart Stores Inc's asset turnover of last year was 2.42426812. ==> 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+0+1+1+0+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Wal-Mart Stores 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 own currency.

Wal-Mart Stores Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111111111
Q2 1111111111
Q3 1001011010
Q4 1111111111
Q5 0010000010
Q6 0010101001
Q7 1111111111
Q8 1111110000
Q9 0000010000
F-score 6576676465

Wal-Mart Stores Inc Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Q1 1111111111
Q2 1111111111
Q3 1000011100
Q4 1111111111
Q5 0011111100
Q6 1000000111
Q7 1111111111
Q8 0000000110
Q9 0010100100
F-score 6465666965
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