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

Good Sign:

Piotroski F-Score of 7 is 7, 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

Wal-Mart Stores Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

WMT' s 10-Year Piotroski F-Score Range
Min: 4   Max: 8
Current: 7

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 (Oct14) TTM:Last Year (Oct13) TTM:
Net Income was 4431 + 3593 + 4093 + 3711 = $15,828 Mil.
Cash Flow from Operations was 9937 + 5939 + 5961 + 3570 = $25,407 Mil.
Revenue was 129706 + 114960 + 120125 + 119001 = $483,792 Mil.
Gross Profit was 31735 + 28246 + 30115 + 29754 = $119,850 Mil.
Average Total Assets from the begining of this year (Oct13)
to the end of this year (Oct14) was
(209876 + 204751 + 202746 + 203985 + 207889) / 5 = $205849.4 Mil.
Total Assets at the begining of this year (Oct13) was $209,876 Mil.
Long-Term Debt was $44,487 Mil.
Total Current Assets was $65,841 Mil.
Total Current Liabilities was $71,560 Mil.
Net Income was 5606 + 3784 + 4069 + 3738 = $17,197 Mil.

Revenue was 127776 + 114070 + 116830 + 115688 = $474,364 Mil.
Gross Profit was 31705 + 28079 + 29410 + 29001 = $118,195 Mil.
Average Total Assets from the begining of last year (Oct12)
to the end of last year (Oct13) was
(205818 + 203105 + 202187 + 200969 + 209876) / 5 = $204391 Mil.
Total Assets at the begining of last year (Oct12) was $205,818 Mil.
Long-Term Debt was $44,543 Mil.
Total Current Assets was $67,142 Mil.
Total Current Liabilities was $77,021 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 (TTM) was 15,828. ==> 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 (TTM) was 25,407. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Oct13)
=15828/209876
=0.07541596

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Oct12)
=17197/205818
=0.0835544

Wal-Mart Stores Inc's return on assets of this year was 0.07541596. Wal-Mart Stores Inc's return on assets of last year was 0.0835544. ==> 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 (TTM) was 15,828. Wal-Mart Stores Inc's current cash flow from operations (TTM) was 25,407. ==> 25,407 > 15,828 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Oct14)=Long-Term Debt/Average Total Assets from Oct13 to Oct14
=44487/205849.4
=0.2161143

Gearing (Last Year: Oct13)=Long-Term Debt/Average Total Assets from Oct12 to Oct13
=44543/204391
=0.21793034

Wal-Mart Stores Inc's gearing of this year was 0.2161143. Wal-Mart Stores Inc's gearing of last year was 0.21793034. ==> This year is lower or equal to last year. ==> 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: Oct14)=Total Current Assets/Total Current Liabilities
=65841/71560
=0.92008105

Current Ratio (Last Year: Oct13)=Total Current Assets/Total Current Liabilities
=67142/77021
=0.87173628

Wal-Mart Stores Inc's current ratio of this year was 0.92008105. Wal-Mart Stores Inc's current ratio of last year was 0.87173628. ==> 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 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 3240. Wal-Mart Stores Inc's number of shares in issue last year was 3271. ==> There is smaller number of shares in issue this year, or the same. ==> 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: TTM)=Gross Profit/Revenue
=119850/483792
=0.24773043

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=118195/474364
=0.2491652

Wal-Mart Stores Inc's gross margin of this year was 0.24773043. Wal-Mart Stores Inc's gross margin of last year was 0.2491652. ==> Last year's gross margin is higher ==> Score 0.

Q9. 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 (Oct13)
=483792/209876
=2.30513255

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Oct12)
=474364/205818
=2.30477412

Wal-Mart Stores Inc's asset turnover of this year was 2.30513255. Wal-Mart Stores Inc's asset turnover of last year was 2.30477412. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+1+1+1+0+1
=7

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

Wal-Mart Stores Inc has an F-score of 7. 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.

Wal-Mart Stores Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111111111
Q2 1111111111
Q3 1001011010
Q4 1111111111
Q5 0011100010
Q6 0010101001
Q7 1111111111
Q8 1111110000
Q9 0000010000
F-score 6577776465

Wal-Mart Stores Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Q1 1111111111
Q2 1111111111
Q3 0011100000
Q4 1111111111
Q5 1111100001
Q6 0000111111
Q7 1111111111
Q8 0000010000
Q9 0100100001
F-score 5666865557
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