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Verisk Analytics Inc  (NAS:VRSK) Piotroski F-Score: 6 (As of Today)

The zones of discrimination were as such:

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

Verisk Analytics Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

NAS:VRSK' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 8
Current: 6

4
8

During the past 12 years, the highest Piotroski F-Score of Verisk Analytics Inc 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.

Verisk Analytics Inc Annual Data

Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.00 6.00 5.00 7.00 6.00

Verisk Analytics Inc Quarterly Data

Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19
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 7.00 6.00 6.00 6.00 6.00

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.


Verisk Analytics Inc Distribution

* The bar in red indicates where Verisk Analytics Inc'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 in their local exchange's currency.

This Year (Mar19) TTM:Last Year (Mar18) TTM:
Net Income was 153.5 + 166 + 146.2 + 134.4 = USD 600 Mil.
Cash Flow from Operations was 207.2 + 226.8 + 173.4 + 366.1 = USD 974 Mil.
Revenue was 601.3 + 598.7 + 613.9 + 625 = USD 2,439 Mil.
Gross Profit was 378.9 + 379.5 + 389.9 + 393.6 = USD 1,542 Mil.
Average Total Assets from the begining of this year (Mar18)
to the end of this year (Mar19) was
(6246.9 + 6039.6 + 5851.1 + 5900.3 + 6341.1) / 5 = USD 6075.8 Mil.
Total Assets at the begining of this year (Mar18) was USD 6,247 Mil.
Long-Term Debt & Capital Lease Obligation was USD 2,443 Mil.
Total Current Assets was USD 735 Mil.
Total Current Liabilities was USD 1,058 Mil.
Net Income was 121 + 120.7 + 204.6 + 133 = USD 579 Mil.

Revenue was 523.2 + 549.1 + 570.3 + 581.2 = USD 2,224 Mil.
Gross Profit was 329.5 + 350.6 + 361.6 + 360 = USD 1,402 Mil.
Average Net Income from the begining of last year (Mar17)
to the end of last year (Mar18) was
(4748.7 + 4898.7 + 5628.2 + 6020.3 + 6246.9) / 5 = USD 5508.56 Mil.
Total Assets at the begining of last year (Mar17) was USD 4,749 Mil.
Long-Term Debt & Capital Lease Obligation was USD 2,041 Mil.
Total Current Assets was USD 709 Mil.
Total Current Liabilities was USD 1,558 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.

Verisk Analytics Inc's current Net Income (TTM) was 600. ==> 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.

Verisk Analytics Inc's current Cash Flow from Operations (TTM) was 974. ==> 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(Mar18)
=600.1/6246.9
=0.09606365

ROA (Last Year)=Net Income/Total Assets(Mar17)
=579.3/4748.7
=0.12199128

Verisk Analytics Inc's return on assets of this year was 0.09606365. Verisk Analytics Inc's return on assets of last year was 0.12199128. ==> 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.

Verisk Analytics Inc's current Net Income (TTM) was 600. Verisk Analytics Inc's current Cash Flow from Operations (TTM) was 974. ==> 974 > 600 ==> 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: Mar19)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Mar18 to Mar19
=2443.3/6075.8
=0.40213634

Gearing (Last Year: Mar18)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Mar17 to Mar18
=2041.1/5508.56
=0.37053241

Verisk Analytics Inc's gearing of this year was 0.40213634. Verisk Analytics Inc's gearing of last year was 0.37053241. ==> Last year is lower than this year ==> Score 0.

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: Mar19)=Total Current Assets/Total Current Liabilities
=734.9/1058.4
=0.69434996

Current Ratio (Last Year: Mar18)=Total Current Assets/Total Current Liabilities
=708.6/1558.1
=0.45478467

Verisk Analytics Inc's current ratio of this year was 0.69434996. Verisk Analytics Inc's current ratio of last year was 0.45478467. ==> 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.

Verisk Analytics Inc's number of shares in issue this year was 166.5. Verisk Analytics Inc's number of shares in issue last year was 169. ==> 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
=1541.9/2438.9
=0.63221124

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1401.7/2223.8
=0.63031747

Verisk Analytics Inc's gross margin of this year was 0.63221124. Verisk Analytics Inc's gross margin of last year was 0.63031747. ==> 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 (Mar18)
=2438.9/6246.9
=0.39041765

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Mar17)
=2223.8/4748.7
=0.46829659

Verisk Analytics Inc's asset turnover of this year was 0.39041765. Verisk Analytics Inc's asset turnover of last year was 0.46829659. ==> 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+0+1+1+1+0
=6

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

Verisk Analytics Inc has an F-score of 6 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.


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