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Flextronics International Ltd (NAS:FLEX)
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

Flextronics International Ltd has an F-score of 6 indicating the company's financial situation is typical for a stable company.

FLEX' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 9
Current: 6

1
9

During the past 13 years, the highest Piotroski F-Score of Flextronics International Ltd was 9. The lowest was 1. And the median was 5.


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 own currency.

This Year (Jun16) TTM:Last Year (Jun15) TTM:
Net Income was 122.977 + 148.91 + 61.344 + 105.729 = $439 Mil.
Cash Flow from Operations was 299.719 + 277.777 + 196.673 + 263.932 = $1,038 Mil.
Revenue was 6316.762 + 6763.177 + 5772.698 + 5876.813 = $24,729 Mil.
Gross Profit was 396.916 + 452.467 + 406.337 + 405.995 = $1,662 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(12100.18 + 12660.339 + 13049.518 + 12384.981 + 12508.524) / 5 = $12540.7084 Mil.
Total Assets at the begining of this year (Jun15) was $12,100 Mil.
Long-Term Debt was $2,693 Mil.
Total Current Assets was $8,421 Mil.
Total Current Liabilities was $6,628 Mil.
Net Income was 138.903 + 152.899 + 135.112 + 110.85 = $538 Mil.

Revenue was 6528.517 + 7025.054 + 5951.6 + 5566.248 = $25,071 Mil.
Gross Profit was 377.081 + 408.657 + 378.817 + 352.341 = $1,517 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(12067.824 + 11919.873 + 12090.473 + 11652.891 + 12100.18) / 5 = $11966.2482 Mil.
Total Assets at the begining of last year (Jun14) was $12,068 Mil.
Long-Term Debt was $2,632 Mil.
Total Current Assets was $9,080 Mil.
Total Current Liabilities was $6,496 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.

Flextronics International Ltd's current net income (TTM) was 439. ==> 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.

Flextronics International Ltd's current cash flow from operations (TTM) was 1,038. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Jun15)
=438.96/12100.18
=0.03627715

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=537.764/12067.824
=0.0445618

Flextronics International Ltd's return on assets of this year was 0.03627715. Flextronics International Ltd's return on assets of last year was 0.0445618. ==> 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.

Flextronics International Ltd's current net income (TTM) was 439. Flextronics International Ltd's current cash flow from operations (TTM) was 1,038. ==> 1,038 > 439 ==> 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: Jun16)=Long-Term Debt/Average Total Assets from Jun15 to Jun16
=2692.596/12540.7084
=0.21470845

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=2632.138/11966.2482
=0.21996351

Flextronics International Ltd's gearing of this year was 0.21470845. Flextronics International Ltd's gearing of last year was 0.21996351. ==> 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: Jun16)=Total Current Assets/Total Current Liabilities
=8420.959/6627.703
=1.27056976

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=9080.227/6496.228
=1.39776914

Flextronics International Ltd's current ratio of this year was 1.27056976. Flextronics International Ltd's current ratio of last year was 1.39776914. ==> 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.

Flextronics International Ltd's number of shares in issue this year was 551. Flextronics International Ltd's number of shares in issue last year was 578. ==> 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
=1661.715/24729.45
=0.06719579

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1516.896/25071.419
=0.060503

Flextronics International Ltd's gross margin of this year was 0.06719579. Flextronics International Ltd's gross margin of last year was 0.060503. ==> 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 (Jun15)
=24729.45/12100.18
=2.0437258

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=25071.419/12067.824
=2.07754265

Flextronics International Ltd's asset turnover of this year was 2.0437258. Flextronics International Ltd's asset turnover of last year was 2.07754265. ==> 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+1+1+0
=6

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

Flextronics International Ltd 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.


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 own currency.

Flextronics International Ltd Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
Question 1 1001111111
Question 2 1111111111
Question 3 1001100110
Question 4 0111111111
Question 5 1010011010
Question 6 1101110010
Question 7 1000111111
Question 8 0001100111
Question 9 1101100101
F-score 7437865786

Flextronics International Ltd Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1111111111
Question 2 1111111111
Question 3 1111111100
Question 4 1111111111
Question 5 0011100001
Question 6 0111111000
Question 7 1111111111
Question 8 1111111111
Question 9 1110000010
F-score 7898877666
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