The Fundamental Health Trend Meter gives a visual representation of the trend in a company's accounts and its overall financial health. It is based on the Piotroski F-Score, a nine-criteria scoring system developed by financial academic, Joseph Piotroski in a famous research paper. Each of the nine points relate to the change in a ratio based on the company's accounts.
Companies with a score of 8 or 9 have been found as a group to outperform weak stocks by 7.5% annually over a 20 year period. The weakest stocks, scoring 2 or lower, were found by Piotroski to be five times more likely to fall into financial problems.
Vodafone has an F-Score of 3 indicating
the company's accounts may be weakening.
Profitability
"A positive earnings trend is suggestive of an improvement in the firm’s underlying ability to generate positive future cash flows."
Is the company making a profit?
Testing for:
ROA TTM > 0
Vodafone Details:
ROA TTM = -1.22
Testing for:
CFROA TTM > 0
Vodafone Details:
CFROA TTM = 7.62
Is it making more cash than it's reporting as profit?
Testing for:
CFROA TTM > ROA TTM
Vodafone Details:
CFROA TTM = 7.62 ,
ROA TTM = -1.22
Is it more profitable than it was last year?
Testing for:
ROA TTM > ROA Prior TTM
Vodafone Details:
ROA TTM = -1.22 ,
ROA Prior TTM = 4.60
Leverage, Liquidity, and Source of funds
"I assume that an increase in leverage, a deterioration of liquidity, or the use of external financing is a bad signal about financial risk."
Is the company's long term debt reducing or stable?
Testing for:
LT Debt / Avg Assets <= Long Term Debt/Assets PTTM
Vodafone Details:
LT Debt / Avg Assets = 19.9 ,
Long Term Debt/Assets PTTM = 19.1
Is it increasing its ability to pay short term debts
Testing for:
Current Ratio > Current Ratio PTTM
Vodafone Details:
Current Ratio = 0.74 ,
Current Ratio PTTM = 0.84
Is the company trading without having to raise funds from shareholders?
Testing for:
Equity Dilution Funding (TTM) <= 0.01 x Mkt Cap (Local)
Vodafone Details:
Equity Dilution Funding (TTM) = -2,811 ,
Mkt Cap (Local) = 97,783
Operating Efficiency
"The remaining two signals are designed to measure changes in the efficiency of the firm’s operations."
Is pricing power improving and/or costs reducing?
Testing for:
Gross Mgn % > Gross Mgn % Prior TTM
Vodafone Details:
Gross Mgn % = 31.0 ,
Gross Mgn % Prior TTM = 32.0
Is it more productive than last year?
Testing for:
Asset Turnover (Piotroski) TTM > Asset Turnover (Piotroksi), PTTM
Vodafone Details:
Asset Turnover (Piotroski) TTM = 0.32 ,
Asset Turnover (Piotroksi), PTTM = 0.34
