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First Solar Inc (NAS:FSLR)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

First Solar Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.

FSLR' s 10-Year Piotroski F-Score Range
Min: 2   Max: 7
Current: 4

2
7

During the past 13 years, the highest Piotroski F-Score of First Solar Inc was 7. The lowest was 2. And the median was 4.


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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 4.528 + 112.007 + 65.26 + 195.038 = $377 Mil.
Cash Flow from Operations was 118.38 + -318.176 + 192.206 + 375.092 = $368 Mil.
Revenue was 544.353 + 950.158 + 768.437 + 1265.587 = $3,529 Mil.
Gross Profit was 92.725 + 236.711 + 189.296 + 364.034 = $883 Mil.
Total Assets at the begining of this year (Jun13) was $6,868 Mil.
Total Assets was $6,612 Mil.
Long-Term Debt was $134 Mil.
Total Current Assets was $3,170 Mil.
Total Current Liabilities was $1,211 Mil.
Net Income was 33.598 + 59.142 + 154.178 + 87.917 = $335 Mil.

Revenue was 519.76 + 755.205 + 1075.011 + 839.147 = $3,189 Mil.
Gross Profit was 140.098 + 169.326 + 293.547 + 238.716 = $842 Mil.
Total Assets at the begining of last year (Jun12) was $5,487 Mil.
Total Assets was $6,868 Mil.
Long-Term Debt was $195 Mil.
Total Current Assets was $3,601 Mil.
Total Current Liabilities was $1,855 Mil.

Profitability

Q1. 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.

First Solar Inc's current net income was 377. ==> Positive ==> Score 1.

Q2. 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.

First Solar Inc's current cash flow from operations was 368. ==> Positive ==> Score 1.

Q3. 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 at the beginning of this year (Jun13)
=376.833/6868.126
=0.05486693

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=334.835/5487.334
=0.06101961

First Solar Inc's return on assets of this year was 0.05486693. First Solar Inc's return on assets of last year was 0.06101961. ==> Last year is higher ==> Score 0.

Q4. 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.

First Solar Inc's current net income was 377. First Solar Inc's current cash flow from operations was 368. ==> 368 =< 377 ==> CFROA =< ROA ==> Score 0.

Funding

Q5. 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)=Long-Term Debt/Total Assets
=133.836/6612.015
=0.02024133

Gearing (Last Year)=Long-Term Debt/Total Assets
=194.57/6868.126
=0.02832942

First Solar Inc's gearing of this year was 0.02024133. First Solar Inc's gearing of last year was 0.02832942. ==> This year is lower or equal to last year. ==> Score 1.

Q6. 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)=Total Current Assets/Total Current Liabilities
=3170.269/1211.243
=2.61736827

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=3601.279/1854.795
=1.94160487

First Solar Inc's current ratio of this year was 2.61736827. First Solar Inc's current ratio of last year was 1.94160487. ==> This year's current ratio is higher. ==> Score 1.

Q7. 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.

First Solar Inc's number of shares in issue this year was 101.8. First Solar Inc's number of shares in issue last year was 91.1. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Q8. 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)=Gross Profit/Revenue
=882.766/3528.535
=0.25017918

Gross Margin (Last Year)=Gross Profit/Revenue
=841.687/3189.123
=0.26392428

First Solar Inc's gross margin of this year was 0.25017918. First Solar Inc's gross margin of last year was 0.26392428. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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 (Jun13)
=3528.535/6868.126
=0.51375513

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=3189.123/5487.334
=0.58117895

First Solar Inc's asset turnover of this year was 0.51375513. First Solar Inc's asset turnover of last year was 0.58117895. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+0+1+1+0+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

First Solar Inc has an F-score of 4 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.

First Solar Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 11111001
Q2 01111011
Q3 11010001
Q4 01111111
Q5 11010011
Q6 10010000
Q7 00000100
Q8 11100001
Q9 10110000
F-score 66573236

First Solar Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 0000111111
Q2 0111111111
Q3 0000111100
Q4 1111111110
Q5 0011111111
Q6 0000000011
Q7 1000000000
Q8 0000001110
Q9 0000101000
F-score 2233657664
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