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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.

NYSE:WMT' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 9
Current: 7

2
9

During the past 13 years, the highest Piotroski F-Score of Wal-Mart Stores Inc was 9. The lowest was 2. 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.

Wal-Mart Stores Inc Annual Data

Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 5.00 9.00 5.00 7.00

Wal-Mart Stores Inc Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17
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 7.00 7.00 7.00 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 (Jul17) TTM:Last Year (Jul16) TTM:
Net Income was 3034 + 3757 + 3039 + 2899 = $12,729 Mil.
Cash Flow from Operations was 4713 + 11886 + 5385 + 5975 = $27,959 Mil.
Revenue was 118179 + 130936 + 117542 + 123355 = $490,012 Mil.
Gross Profit was 30695 + 33193 + 29854 + 31834 = $125,576 Mil.
Average Total Assets from the begining of this year (Jul16)
to the end of this year (Jul17) was
(197886 + 206857 + 198825 + 199718 + 201566) / 5 = $200970.4 Mil.
Total Assets at the begining of this year ({FiscalYear0}) was $197,886 Mil.
Long-Term Debt & Capital Lease Obligation was $40,469 Mil.
Total Current Assets was $56,763 Mil.
Total Current Liabilities was $72,811 Mil.
Total Assets was 3304 + 4574 + 3079 + 3773 = $14,730 Mil.

Revenue was 117408 + 129667 + 115904 + 120854 = $483,833 Mil.
Gross Profit was 29962 + 32668 + 29360 + 31369 = $123,359 Mil.
Average Total Assets from the begining of last year (Jul15)
to the end of last year (Jul16) was
(198620 + 205144 + 199581 + 198705 + 197886) / 5 = $199987.2 Mil.
Total Assets at the begining of last year (Jul15) was $198,620 Mil.
Long-Term Debt & Capital Lease Obligation was $42,743 Mil.
Total Current Assets was $58,232 Mil.
Total Current Liabilities was $68,122 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.

Wal-Mart Stores Inc's current Net Income (TTM) was {NetIncome0_f}. ==> 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.

Wal-Mart Stores Inc's current Cash Flow from Operations (TTM) was 27,959. ==> 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(Jul16)
=12729/197886
=0.06432491

ROA (Last Year)=Net Income/Total Assets(Jul15)
=14730/198620
=0.07416172

Wal-Mart Stores Inc's return on assets of this year was 0.06432491. Wal-Mart Stores Inc's return on assets of last year was 0.07416172. ==> 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.

Wal-Mart Stores Inc's current Net Income (TTM) was 12,729. Wal-Mart Stores Inc's current Cash Flow from Operations (TTM) was 27,959. ==> 27,959 > 12,729 ==> 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: Jul17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jul16 to Jul17
=40469/200970.4
=0.20136796

Gearing (Last Year: Jul16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jul15 to Jul16
=42743/199987.2
=0.21372868

Wal-Mart Stores Inc's gearing of this year was 0.20136796. Wal-Mart Stores Inc's gearing of last year was 0.21372868. ==> 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: Jul17)=Total Current Assets/Total Current Liabilities
=56763/72811
=0.77959374

Current Ratio (Last Year: Jul16)=Total Current Assets/Total Current Liabilities
=58232/68122
=0.85481929

Wal-Mart Stores Inc's current ratio of this year was 0.77959374. Wal-Mart Stores Inc's current ratio of last year was 0.85481929. ==> 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.

Wal-Mart Stores Inc's number of shares in issue this year was 3021. Wal-Mart Stores Inc's number of shares in issue last year was 3119. ==> 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
=125576/490012
=0.25627127

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=123359/483833
=0.25496194

Wal-Mart Stores Inc's gross margin of this year was 0.25627127. Wal-Mart Stores Inc's gross margin of last year was 0.25496194. ==> 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 (Jul16)
=490012/197886
=2.47623379

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jul15)
=483833/198620
=2.43597322

Wal-Mart Stores Inc's asset turnover of this year was 2.47623379. Wal-Mart Stores Inc's asset turnover of last year was 2.43597322. ==> 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+0+1+1+0+1+1+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.


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