Market Cap : 42.88 B | Enterprise Value : 43.17 B | PE Ratio : 74.25 | PB Ratio : 19.06 |
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The zones of discrimination were as such:
Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
Lululemon Athletica has an F-score of 5 indicating the company's financial situation is typical for a stable company.
During the past 13 years, the highest Piotroski F-Score of Lululemon Athletica was 9. The lowest was 2. And the median was 6.
* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.
* The bar in red indicates where Lululemon Athletica's Piotroski F-Score falls into.
How is the Piotroski F-Score calculated?
* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.
This Year (Oct20) TTM: | Last Year (Oct19) TTM: |
Net Income was 298.021 + 28.632 + 86.801 + 143.643 = $557 Mil. Cash Flow from Operations was 574.21 + -121.243 + 181.305 + 25.342 = $660 Mil. Revenue was 1397.491 + 651.962 + 902.942 + 1117.426 = $4,070 Mil. Gross Profit was 810.826 + 334.402 + 489.501 + 627.354 = $2,262 Mil. Average Total Assets from the begining of this year (Oct19) to the end of this year (Oct20) was (2855.144 + 3281.354 + 3201.786 + 3494.027 + 3627.92) / 5 = $3292.0462 Mil. Total Assets at the begining of this year (Oct19) was $2,855 Mil. Long-Term Debt & Capital Lease Obligation was $635 Mil. Total Current Assets was $1,601 Mil. Total Current Liabilities was $731 Mil. |
Net Income was 218.465 + 96.603 + 124.99 + 125.982 = $566 Mil. Revenue was 1167.458 + 782.315 + 883.352 + 916.138 = $3,749 Mil. Gross Profit was 668.583 + 421.72 + 485.796 + 505.044 = $2,081 Mil. Average Total Assets from the begining of last year (Oct18) to the end of last year (Oct19) was (1981.011 + 2084.711 + 2463.02 + 2694.744 + 2855.144) / 5 = $2415.726 Mil. Total Assets at the begining of last year (Oct18) was $1,981 Mil. Long-Term Debt & Capital Lease Obligation was $564 Mil. Total Current Assets was $1,452 Mil. Total Current Liabilities was $575 Mil. |
*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.
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.
Lululemon Athletica's current Net Income (TTM) was 557.
==> 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.
Lululemon Athletica's current Cash Flow from Operations (TTM) was 660.
==> 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 (Oct19) |
= | 557.097 | / | 2855.144 | |
= | 0.19512046 |
ROA (Last Year) | = | Net Income | / | Total Assets (Oct18) |
= | 566.04 | / | 1981.011 | |
= | 0.28573289 |
Lululemon Athletica's return on assets of this year was 0.19512046. Lululemon Athletica's return on assets of last year was 0.28573289.
==> 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.
Lululemon Athletica's current Net Income (TTM) was 557. Lululemon Athletica's current Cash Flow from Operations (TTM) was 660.
==> 660 > 557 ==> 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: Oct20) | = | Long-Term Debt & Capital Lease Obligation | / | Average Total Assets from Oct19 to Oct20 |
= | 635.386 | / | 3292.0462 | |
= | 0.1930064 |
Gearing (Last Year: Oct19) | = | Long-Term Debt & Capital Lease Obligation | / | Average Total Assets from Oct18 to Oct19 |
= | 563.925 | / | 2415.726 | |
= | 0.23343914 |
Lululemon Athletica's gearing of this year was 0.1930064. Lululemon Athletica's gearing of last year was 0.23343914.
==> 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: Oct20) | = | Total Current Assets | / | Total Current Liabilities |
= | 1600.813 | / | 730.878 | |
= | 2.19026021 |
Current Ratio (Last Year: Oct19) | = | Total Current Assets | / | Total Current Liabilities |
= | 1451.676 | / | 574.769 | |
= | 2.52566857 |
Lululemon Athletica's current ratio of this year was 2.19026021. Lululemon Athletica's current ratio of last year was 2.52566857.
==> 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.
Lululemon Athletica's number of shares in issue this year was 130.924. Lululemon Athletica's number of shares in issue last year was 130.805.
==> 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 |
= | 2262.083 | / | 4069.821 | |
= | 0.55581879 |
Gross Margin (Last Year: TTM) | = | Gross Profit | / | Revenue |
= | 2081.143 | / | 3749.263 | |
= | 0.55508056 |
Lululemon Athletica's gross margin of this year was 0.55581879. Lululemon Athletica's gross margin of last year was 0.55508056.
==> 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 (Oct19) |
= | 4069.821 | / | 2855.144 | |
= | 1.42543458 |
Asset Turnover (Last Year) | = | Revenue | / | Total Assets at the Beginning of Last Year (Oct18) |
= | 3749.263 | / | 1981.011 | |
= | 1.8926008 |
Lululemon Athletica's asset turnover of this year was 1.42543458. Lululemon Athletica's asset turnover of last year was 1.8926008.
==> Last year's asset turnover is higher ==> Score 0.
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 | + | 1 | + | 0 | + | 0 | + | 1 | + | 0 | |
= | 5 |
Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
Lululemon Athletica has an F-score of 5 indicating the company's financial situation is typical for a stable company.
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.
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