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Micron Technology Inc (NAS:MU)
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

Micron Technology Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

MU' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 6

2
9

During the past 13 years, the highest Piotroski F-Score of Micron Technology Inc was 9. 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 (May15) TTM:Last Year (May14) TTM:
Net Income was 1150 + 1003 + 934 + 491 = $3,578 Mil.
Cash Flow from Operations was 1347 + 1592 + 1251 + 1335 = $5,525 Mil.
Revenue was 4227 + 4573 + 4166 + 3853 = $16,819 Mil.
Gross Profit was 1385 + 1638 + 1405 + 1202 = $5,630 Mil.
Average Total Assets from the begining of this year (May14)
to the end of this year (May15) was
(20495 + 22498 + 22542 + 23818 + 25136) / 5 = $22897.8 Mil.
Total Assets at the begining of this year (May14) was $20,495 Mil.
Long-Term Debt was $6,403 Mil.
Total Current Assets was $10,008 Mil.
Total Current Liabilities was $4,566 Mil.
Net Income was 1708 + 358 + 731 + 806 = $3,603 Mil.

Revenue was 2843 + 4042 + 4107 + 3982 = $14,974 Mil.
Gross Profit was 708 + 1281 + 1403 + 1368 = $4,760 Mil.
Average Total Assets from the begining of last year (May13)
to the end of last year (May14) was
(14055 + 19118 + 19794 + 20615 + 20495) / 5 = $18815.4 Mil.
Total Assets at the begining of last year (May13) was $14,055 Mil.
Long-Term Debt was $4,137 Mil.
Total Current Assets was $9,705 Mil.
Total Current Liabilities was $4,760 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.

Micron Technology Inc's current net income (TTM) was 3,578. ==> 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.

Micron Technology Inc's current cash flow from operations (TTM) was 5,525. ==> 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.

Micron Technology Inc's return on assets of this year was 0.17457917. Micron Technology Inc's return on assets of last year was 0.25635005. ==> 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.

Micron Technology Inc's current net income (TTM) was 3,578. Micron Technology Inc's current cash flow from operations (TTM) was 5,525. ==> 5,525 > 3,578 ==> 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: May15)=Long-Term Debt/Average Total Assets from May14 to May15
=6403/22897.8
=0.27963385

Gearing (Last Year: May14)=Long-Term Debt/Average Total Assets from May13 to May14
=4137/18815.4
=0.21987308

Micron Technology Inc's gearing of this year was 0.27963385. Micron Technology Inc's gearing of last year was 0.21987308. ==> 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: May15)=Total Current Assets/Total Current Liabilities
=10008/4566
=2.19185283

Current Ratio (Last Year: May14)=Total Current Assets/Total Current Liabilities
=9705/4760
=2.03886555

Micron Technology Inc's current ratio of this year was 2.19185283. Micron Technology Inc's current ratio of last year was 2.03886555. ==> This year's current ratio is higher. ==> Score 1.

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.

Micron Technology Inc's number of shares in issue this year was 1170. Micron Technology Inc's number of shares in issue last year was 1190. ==> 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
=5630/16819
=0.33474047

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=4760/14974
=0.31788433

Micron Technology Inc's gross margin of this year was 0.33474047. Micron Technology Inc's gross margin of last year was 0.31788433. ==> 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 (May14)
=16819/20495
=0.82063918

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (May13)
=14974/14055
=1.06538598

Micron Technology Inc's asset turnover of this year was 0.82063918. Micron Technology Inc's asset turnover of last year was 1.06538598. ==> 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+1+1+1+0
=6

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

Micron Technology Inc 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.

Micron Technology Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
Question 1 1100011011
Question 2 1111111111
Question 3 1100010011
Question 4 1111111111
Question 5 1100011001
Question 6 1100011100
Question 7 1000001000
Question 8 0000010011
Question 9 1100010011
F-score 8722286367

Micron Technology Inc Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
Question 1 0011111111
Question 2 1111111111
Question 3 0111111100
Question 4 1111111111
Question 5 0000011100
Question 6 0000000111
Question 7 0000000111
Question 8 0111111111
Question 9 0011111100
F-score 2466677966
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