Switch to:
Diageo PLC  (NYSE:DEO) 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

Diageo PLC has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

NYSE:DEO' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 8
Current: 7

4
8

During the past 13 years, the highest Piotroski F-Score of Diageo PLC was 8. The lowest was 4. And the median was 6.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Diageo PLC Annual Data

Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 4.00 6.00 5.00 7.00

Diageo PLC Semi-Annual Data

Dec07 Jun08 Dec08 Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 2.00 5.00 1.00 7.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

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 (Jun17) TTM:Last Year (Jun16) TTM:
Net Income was $3,479 Mil.
Cash Flow from Operations was $4,010 Mil.
Revenue was $15,429 Mil.
Gross Profit was $9,437 Mil.
Average Total Assets from the begining of this year (Jun16)
to the end of this year (Jun17) was (40470.1704545 + 36937.2599232) / 2 = $38703.7151889 Mil.
Total Assets at the begining of this year (Jun16) was $40,470 Mil.
Long-Term Debt & Capital Lease Obligation was $8,630 Mil.
Total Current Assets was $11,078 Mil.
Total Current Liabilities was $8,528 Mil.
Net Income was $3,188 Mil.

Revenue was $14,893 Mil.
Gross Profit was $8,855 Mil.
Average Net Income from the begining of last year (Jun15)
to the end of last year (Jun16) was (40193.1464174 + 40470.1704545) / 2 = $40331.658436 Mil.
Total Assets at the begining of last year (Jun15) was $40,193 Mil.
Long-Term Debt & Capital Lease Obligation was $11,767 Mil.
Total Current Assets was $12,574 Mil.
Total Current Liabilities was $8,788 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.

Diageo PLC's current Net Income (TTM) was 3,479. ==> 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.

Diageo PLC's current Cash Flow from Operations (TTM) was 4,010. ==> 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/Total Assets(Jun16)
=3478.87323944/40470.1704545
=0.08596142

ROA (Last Year)=Net Income/Total Assets(Jun15)
=3187.5/40193.1464174
=0.07930457

Diageo PLC's return on assets of this year was 0.08596142. Diageo PLC's return on assets of last year was 0.07930457. ==> This year is higher. ==> Score 1.

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.

Diageo PLC's current Net Income (TTM) was 3,479. Diageo PLC's current Cash Flow from Operations (TTM) was 4,010. ==> 4,010 > 3,479 ==> 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: Jun17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jun16 to Jun17
=8629.96158771/38703.7151889
=0.22297502

Gearing (Last Year: Jun16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jun15 to Jun16
=11767.0454545/40331.658436
=0.29175704

Diageo PLC's gearing of this year was 0.22297502. Diageo PLC's gearing of last year was 0.29175704. ==> 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: Jun17)=Total Current Assets/Total Current Liabilities
=11078.1049936/8527.52880922
=1.2990991

Current Ratio (Last Year: Jun16)=Total Current Assets/Total Current Liabilities
=12573.8636364/8788.35227273
=1.43074188

Diageo PLC's current ratio of this year was 1.2990991. Diageo PLC's current ratio of last year was 1.43074188. ==> 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.

Diageo PLC's number of shares in issue this year was 630.8. Diageo PLC's number of shares in issue last year was 629.5. ==> There is larger number of shares in issue this year. ==> Score 0.

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
=9436.61971831/15428.9372599
=0.61161826

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=8855.11363636/14893.4659091
=0.59456366

Diageo PLC's gross margin of this year was 0.61161826. Diageo PLC's gross margin of last year was 0.59456366. ==> 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/Total Assets at the Beginning of This Year (Jun16)
=15428.9372599/40470.1704545
=0.38124221

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jun15)
=14893.4659091/40193.1464174
=0.3705474

Diageo PLC's asset turnover of this year was 0.38124221. Diageo PLC's asset turnover of last year was 0.3705474. ==> 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+1+1+1+0+0+1+1
=7

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

Diageo PLC 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


Headlines

From the Internet

DEO
7 Black Friday Sales Thankful 2018

- Seekingalpha 2017-11-24 09:10:39

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK