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Micron Technology Inc (NAS:MU)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

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

Micron Technology Inc has an F-score of 7 indicating the company's financial situation is typical for a stable company.

MU' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 7

2
8

During the past 13 years, the highest Piotroski F-Score of Micron Technology Inc was 8. The lowest was 2. 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 (May14) TTM:Last Year (May13) TTM:
Net Income was 806 + 731 + 358 + 1708 = $3,603 Mil.
Cash Flow from Operations was 1455 + 1390 + 1507 + 1577 = $5,929 Mil.
Revenue was 3982 + 4107 + 4042 + 2843 = $14,974 Mil.
Gross Profit was 1368 + 1403 + 1281 + 708 = $4,760 Mil.
Total Assets at the begining of this year (May13) was $14,055 Mil.
Total Assets was $20,495 Mil.
Long-Term Debt was $4,137 Mil.
Total Current Assets was $9,705 Mil.
Total Current Liabilities was $4,760 Mil.
Net Income was 43 + -286 + -275 + -243 = $-761 Mil.

Revenue was 2318 + 2078 + 1834 + 1963 = $8,193 Mil.
Gross Profit was 556 + 366 + 217 + 219 = $1,358 Mil.
Total Assets at the begining of last year (May12) was $14,316 Mil.
Total Assets was $14,055 Mil.
Long-Term Debt was $3,267 Mil.
Total Current Assets was $5,886 Mil.
Total Current Liabilities was $2,342 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.

Micron Technology Inc's current net income was 3,603. ==> 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.

Micron Technology Inc's current cash flow from operations was 5,929. ==> 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 (May13)
=3603/14055
=0.25635005

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (May12)
=-761/14316
=-0.05315731

Micron Technology Inc's return on assets of this year was 0.25635005. Micron Technology Inc's return on assets of last year was -0.05315731. ==> This year is higher. ==> Score 1.

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.

Micron Technology Inc's current net income was 3,603. Micron Technology Inc's current cash flow from operations was 5,929. ==> 5,929 > 3,603 ==> CFROA > ROA ==> Score 1.

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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=4137/20495
=0.20185411

Gearing (Last Year)=Long-Term Debt/Total Assets
=3267/14055
=0.23244397

Micron Technology Inc's gearing of this year was 0.20185411. Micron Technology Inc's gearing of last year was 0.23244397. ==> This year is lower. ==> 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
=9705/4760
=2.03886555

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=5886/2342
=2.51323655

Micron Technology Inc's current ratio of this year was 2.03886555. Micron Technology Inc's current ratio of last year was 2.51323655. ==> Last year's current ratio is higher ==> Score 0.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Micron Technology Inc's number of shares in issue this year was 1190. Micron Technology Inc's number of shares in issue last year was 1046.6. ==> There is more 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
=4760/14974
=0.31788433

Gross Margin (Last Year)=Gross Profit/Revenue
=1358/8193
=0.16575125

Micron Technology Inc's gross margin of this year was 0.31788433. Micron Technology Inc's gross margin of last year was 0.16575125. ==> This year's gross margin is higher. ==> Score 1.

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 (May13)
=14974/14055
=1.06538598

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (May12)
=8193/14316
=0.57229673

Micron Technology Inc's asset turnover of this year was 1.06538598. Micron Technology Inc's asset turnover of last year was 0.57229673. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+0+0+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Micron Technology Inc has an F-score of 7 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.

Micron Technology Inc Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
Q1 1110001101
Q2 1111111111
Q3 1110001001
Q4 1111111111
Q5 1110001000
Q6 1110001110
Q7 0100000110
Q8 1000001001
Q9 1110001001
F-score 8872228546

Micron Technology Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Q1 0000001111
Q2 1111111111
Q3 0000011111
Q4 1111111111
Q5 0000000111
Q6 1110000000
Q7 1100000000
Q8 0000011111
Q9 0000001111
F-score 4432246777
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