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F5 Networks Inc (NAS:FFIV)
Piotroski F-Score
9 (As of Today)

Good Sign:

Piotroski F-Score of 9 is 9, 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

F5 Networks Inc has an F-score of 9. It is a good or high score, which usually indicates a very healthy situation.

FFIV' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 9

3
9

During the past 13 years, the highest Piotroski F-Score of F5 Networks Inc was 9. The lowest was 3. And the median was 7.


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 local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Net Income was 91.789 + 108.935 + 94.218 + 93.138 = $388 Mil.
Cash Flow from Operations was 170.476 + 204.07 + 189.312 + 175.34 = $739 Mil.
Revenue was 496.522 + 525.349 + 515.958 + 518.248 = $2,056 Mil.
Gross Profit was 412.179 + 440.4 + 430.696 + 430.336 = $1,714 Mil.
Average Total Assets from the begining of this year (Mar16)
to the end of this year (Mar17) was
(2242.14 + 2253.783 + 2306.323 + 2397.095 + 2387.917) / 5 = $2317.4516 Mil.
Total Assets at the begining of this year (Mar16) was $2,242 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,445 Mil.
Total Current Liabilities was $916 Mil.
Net Income was 93.172 + 97.037 + 89.716 + 75.415 = $355 Mil.

Revenue was 483.586 + 501.301 + 489.486 + 483.677 = $1,958 Mil.
Gross Profit was 397.927 + 416.643 + 403.803 + 401.447 = $1,620 Mil.
Average Total Assets from the begining of last year (Mar15)
to the end of last year (Mar16) was
(2221.279 + 2262.351 + 2312.29 + 2316.081 + 2242.14) / 5 = $2270.8282 Mil.
Total Assets at the begining of last year (Mar15) was $2,221 Mil.
Long-Term Debt was $0 Mil.
Total Current Assets was $1,194 Mil.
Total Current Liabilities was $800 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.

F5 Networks Inc's current net income (TTM) was 388. ==> 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.

F5 Networks Inc's current cash flow from operations (TTM) was 739. ==> 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 (Mar16)
=388.08/2242.14
=0.17308464

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=355.34/2221.279
=0.1599709

F5 Networks Inc's return on assets of this year was 0.17308464. F5 Networks Inc's return on assets of last year was 0.1599709. ==> 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.

F5 Networks Inc's current net income (TTM) was 388. F5 Networks Inc's current cash flow from operations (TTM) was 739. ==> 739 > 388 ==> 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: Mar17)=Long-Term Debt/Average Total Assets from Mar16 to Mar17
=0/2317.4516
=0

Gearing (Last Year: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=0/2270.8282
=0

F5 Networks Inc's gearing of this year was 0. F5 Networks Inc's gearing of last year was 0. ==> 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: Mar17)=Total Current Assets/Total Current Liabilities
=1444.843/916.018
=1.57730852

Current Ratio (Last Year: Mar16)=Total Current Assets/Total Current Liabilities
=1193.981/800.435
=1.49166516

F5 Networks Inc's current ratio of this year was 1.57730852. F5 Networks Inc's current ratio of last year was 1.49166516. ==> This year's current ratio is higher. ==> Score 1.

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.

F5 Networks Inc's number of shares in issue this year was 65. F5 Networks Inc's number of shares in issue last year was 67.8. ==> 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
=1713.611/2056.077
=0.83343717

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1619.82/1958.05
=0.82726182

F5 Networks Inc's gross margin of this year was 0.83343717. F5 Networks Inc's gross margin of last year was 0.82726182. ==> 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 (Mar16)
=2056.077/2242.14
=0.91701544

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=1958.05/2221.279
=0.88149665

F5 Networks Inc's asset turnover of this year was 0.91701544. F5 Networks Inc's asset turnover of last year was 0.88149665. ==> 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+1+1+1+1
=9

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

F5 Networks Inc has an F-score of 9. 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 local exchange's currency.

F5 Networks Inc Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
Question 1 1111111111
Question 2 1111111111
Question 3 0011100010
Question 4 1111111111
Question 5 1111111111
Question 6 0011000110
Question 7 0110111111
Question 8 0011111011
Question 9 0011110110
F-score 4598876796

F5 Networks Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Question 1 1111111111
Question 2 1111111111
Question 3 1111100001
Question 4 1111111111
Question 5 1111111111
Question 6 1011100011
Question 7 1111111111
Question 8 0111111111
Question 9 1111111011
F-score 8899977689
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