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The zones of discrimination were as such:
Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
Time Warner has an F-score of 4 indicating the company's financial situation is typical for a stable company.
The historical rank and industry rank for Time Warner's Piotroski F-Score or its related term are showing as below:
The historical data trend for Time Warner's Piotroski F-Score can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Time Warner Annual Data | |||||||||||||||||||||
Trend | Dec08 | Dec09 | Dec10 | Dec11 | Dec12 | Dec13 | Dec14 | Dec15 | Dec16 | Dec17 | |||||||||||
Piotroski F-Score | Get a 7-Day Free Trial | 8.00 | 5.00 | 8.00 | 8.00 | 5.00 |
Time Warner Quarterly Data | ||||||||||||||||||||
Jun13 | Sep13 | Dec13 | Mar14 | Jun14 | Sep14 | Dec14 | Mar15 | Jun15 | Sep15 | Dec15 | Mar16 | Jun16 | Sep16 | Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | |
Piotroski F-Score | Get a 7-Day Free Trial | 7.00 | 7.00 | 6.00 | 5.00 | 5.00 |
How is the Piotroski F-Score calculated?
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
This Year (Mar18) TTM: | Last Year (Mar17) TTM: |
Net Income was 945.18 + 1151.108 + 1173.705 + 1332.473 = €4,602 Mil. Cash Flow from Operations was 882.88 + 1253.466 + 956.54 + 1067.276 = €4,160 Mil. Revenue was 6523.7 + 6372.205 + 7276.295 + 6484.756 = €26,657 Mil. Gross Profit was 2781.25 + 3076.613 + 2898.35 + 2659.269 = €11,415 Mil. Average Total Assets from the begining of this year (Mar17) to the end of this year (Mar18) was (61381.815 + 58825.44 + 57339.777 + 58481.605 + 55956.567) / 5 = €58397.0408 Mil. Total Assets at the begining of this year (Mar17) was €61,382 Mil. Long-Term Debt & Capital Lease Obligation was €14,866 Mil. Total Current Assets was €12,277 Mil. Total Current Liabilities was €10,498 Mil. |
Net Income was 847.28 + 1307.097 + 277.764 + 1331.44 = €3,764 Mil. Revenue was 6187.28 + 6385.797 + 7480.668 + 7232.225 = €27,286 Mil. Gross Profit was 2769.68 + 2934.954 + 3064.884 + 3181.805 = €11,951 Mil. Average Total Assets from the begining of last year (Mar16) to the end of last year (Mar17) was (56802.092 + 57073.03 + 58595.724 + 62535.768 + 61381.815) / 5 = €59277.6858 Mil. Total Assets at the begining of last year (Mar16) was €56,802 Mil. Long-Term Debt & Capital Lease Obligation was €20,946 Mil. Total Current Assets was €12,069 Mil. Total Current Liabilities was €7,631 Mil. |
*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.
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.
Time Warner's current Net Income (TTM) was 4,602.
==> 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.
Time Warner's current Cash Flow from Operations (TTM) was 4,160.
==> 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 (Mar17) |
= | 4602.466 | / | 61381.815 | |
= | 0.07498094 |
ROA (Last Year) | = | Net Income | / | Total Assets (Mar16) |
= | 3763.581 | / | 56802.092 | |
= | 0.06625779 |
Time Warner's return on assets of this year was 0.07498094. Time Warner's return on assets of last year was 0.06625779.
==> This year is higher. ==> Score 1.
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.
Time Warner's current Net Income (TTM) was 4,602. Time Warner's current Cash Flow from Operations (TTM) was 4,160.
==> 4,160 <= 4,602 ==> CFROA <= ROA ==> Score 0.
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: Mar18) | = | Long-Term Debt & Capital Lease Obligation | / | Average Total Assets from Mar17 to Mar18 |
= | 14866.441 | / | 58397.0408 | |
= | 0.25457525 |
Gearing (Last Year: Mar17) | = | Long-Term Debt & Capital Lease Obligation | / | Average Total Assets from Mar16 to Mar17 |
= | 20945.87 | / | 59277.6858 | |
= | 0.35335168 |
Time Warner's gearing of this year was 0.25457525. Time Warner's gearing of last year was 0.35335168.
==> 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: Mar18) | = | Total Current Assets | / | Total Current Liabilities |
= | 12276.918 | / | 10498.395 | |
= | 1.16940904 |
Current Ratio (Last Year: Mar17) | = | Total Current Assets | / | Total Current Liabilities |
= | 12068.98 | / | 7631.47 | |
= | 1.58147513 |
Time Warner's current ratio of this year was 1.16940904. Time Warner's current ratio of last year was 1.58147513.
==> 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.
Time Warner's number of shares in issue this year was 792. Time Warner's number of shares in issue last year was 789.3.
==> There is larger number of shares in issue this year. ==> Score 0.
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 |
= | 11415.482 | / | 26656.956 | |
= | 0.42823652 |
Gross Margin (Last Year: TTM) | = | Gross Profit | / | Revenue |
= | 11951.323 | / | 27285.97 | |
= | 0.4380025 |
Time Warner's gross margin of this year was 0.42823652. Time Warner's gross margin of last year was 0.4380025.
==> Last year's gross margin is higher ==> Score 0.
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 (Mar17) |
= | 26656.956 | / | 61381.815 | |
= | 0.434281 |
Asset Turnover (Last Year) | = | Revenue | / | Total Assets at the Beginning of Last Year (Mar16) |
= | 27285.97 | / | 56802.092 | |
= | 0.4803691 |
Time Warner's asset turnover of this year was 0.434281. Time Warner's asset turnover of last year was 0.4803691.
==> 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 | + | 1 | + | 0 | + | 1 | + | 0 | + | 0 | + | 0 | + | 0 | |
= | 4 |
Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3
Time Warner has an F-score of 4 indicating the company's financial situation is typical for a stable company.
Time Warner (FRA:AOL1) Piotroski F-Score 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.
Thank you for viewing the detailed overview of Time Warner's Piotroski F-Score provided by GuruFocus.com. Please click on the following links to see related term pages.
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