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Walt Disney Co (NYSE:DIS)
Piotroski F-Score
5 (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

Walt Disney Co has an F-score of 5 indicating the company's financial situation is typical for a stable company.

DIS' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 5

3
8

During the past 13 years, the highest Piotroski F-Score of Walt Disney Co was 8. The lowest was 3. And the median was 6.


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 (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was 2143 + 2597 + 1771 + 2479 = $8,990 Mil.
Cash Flow from Operations was 3306 + 3624 + 3827 + 1260 = $12,017 Mil.
Revenue was 12969 + 14277 + 13142 + 14784 = $55,172 Mil.
Gross Profit was 6105 + 7076 + 5837 + 6378 = $25,396 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(90121 + 90264 + 90914 + 92033 + 91576) / 5 = $90981.6 Mil.
Total Assets at the begining of this year (Dec15) was $90,121 Mil.
Long-Term Debt was $14,792 Mil.
Total Current Assets was $16,665 Mil.
Total Current Liabilities was $19,317 Mil.
Net Income was 2108 + 2483 + 1609 + 2880 = $9,080 Mil.

Revenue was 12461 + 13101 + 13512 + 15244 = $54,318 Mil.
Gross Profit was 5771 + 6438 + 6157 + 6621 = $24,987 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(87035 + 85715 + 87367 + 88182 + 90121) / 5 = $87684 Mil.
Total Assets at the begining of last year (Dec14) was $87,035 Mil.
Long-Term Debt was $12,965 Mil.
Total Current Assets was $17,768 Mil.
Total Current Liabilities was $18,796 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.

Walt Disney Co's current net income (TTM) was 8,990. ==> 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.

Walt Disney Co's current cash flow from operations (TTM) was 12,017. ==> 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.

Walt Disney Co's return on assets of this year was 0.09975477. Walt Disney Co's return on assets of last year was 0.10432585. ==> 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.

Walt Disney Co's current net income (TTM) was 8,990. Walt Disney Co's current cash flow from operations (TTM) was 12,017. ==> 12,017 > 8,990 ==> 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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=14792/90981.6
=0.16258232

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=12965/87684
=0.1478605

Walt Disney Co's gearing of this year was 0.16258232. Walt Disney Co's gearing of last year was 0.1478605. ==> 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: Dec16)=Total Current Assets/Total Current Liabilities
=16665/19317
=0.8627116

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=17768/18796
=0.94530751

Walt Disney Co's current ratio of this year was 0.8627116. Walt Disney Co's current ratio of last year was 0.94530751. ==> 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.

Walt Disney Co's number of shares in issue this year was 1603. Walt Disney Co's number of shares in issue last year was 1668. ==> 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
=25396/55172
=0.46030595

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=24987/54318
=0.46001326

Walt Disney Co's gross margin of this year was 0.46030595. Walt Disney Co's gross margin of last year was 0.46001326. ==> 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 (Dec15)
=55172/90121
=0.61219915

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=54318/87035
=0.62409376

Walt Disney Co's asset turnover of this year was 0.61219915. Walt Disney Co's asset turnover of last year was 0.62409376. ==> 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+0+1+1+0
=5

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

Walt Disney Co has an F-score of 5 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.


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.

Walt Disney Co Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
Question 1 1111111111
Question 2 1111111111
Question 3 1001111111
Question 4 1111111111
Question 5 0101010110
Question 6 1110101000
Question 7 0110111111
Question 8 1101110111
Question 9 0101001011
F-score 6857777787

Walt Disney Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 1111111110
Question 4 1111111111
Question 5 1001100000
Question 6 0110000000
Question 7 1111111111
Question 8 1000111111
Question 9 0111111110
F-score 7777877775
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