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Penn West Petroleum Ltd (NYSE:PWE)
Piotroski F-Score
2 (As of Today)

Warning Sign:

Piotroski F-Score of 2 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Penn West Petroleum Ltd has an F-score of 2. It is a bad or low score, which usually implies poor business operation.

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

2
7

During the past 13 years, the highest Piotroski F-Score of Penn West Petroleum Ltd was 7. 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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was -13.6227408955 + -1536.59382588 + -196.544618799 + -22.6445612616 = $-1,769 Mil.
Cash Flow from Operations was 265.189356098 + 104.058272633 + 123.632905373 + -54.1852001617 = $439 Mil.
Revenue was 552.17509763 + 446.583420049 + 282.136630211 + 305.701577032 = $1,587 Mil.
Gross Profit was 296.067568795 + 195.976413458 + 115.707719131 + 140.719773554 = $748 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(10959.3721145 + 10820.0890019 + 8543.18418314 + 7745.28451419 + 7581.88435099) / 5 = $9129.96283294 Mil.
Total Assets at the begining of this year (Jun14) was $10,959 Mil.
Long-Term Debt was $1,524 Mil.
Total Current Assets was $338 Mil.
Total Current Liabilities was $607 Mil.
Net Income was 26.1121856867 + -684.210526316 + -86.4086408641 + 132.040627886 = $-612 Mil.

Revenue was 706.963249516 + 563.909774436 + 567.056705671 + 636.195752539 = $2,474 Mil.
Gross Profit was 352.998065764 + 257.518796992 + 295.229522952 + 391.505078486 = $1,297 Mil.
Average Total Assets from the begining of last year (Jun13)
to the end of last year (Jun14) was
(14014.5489816 + 13714.7001934 + 11883.4586466 + 11128.7128713 + 10959.3721145) / 5 = $12340.1585615 Mil.
Total Assets at the begining of last year (Jun13) was $14,015 Mil.
Long-Term Debt was $1,827 Mil.
Total Current Assets was $390 Mil.
Total Current Liabilities was $699 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.

Penn West Petroleum Ltd's current net income (TTM) was -1,769. ==> Negative ==> Score 0.

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.

Penn West Petroleum Ltd's current cash flow from operations (TTM) was 439. ==> 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 (Jun14)
=-1769.40574683/10959.3721145
=-0.16145138

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=-612.466353608/14014.5489816
=-0.04370218

Penn West Petroleum Ltd's return on assets of this year was -0.16145138. Penn West Petroleum Ltd's return on assets of last year was -0.04370218. ==> 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.

Penn West Petroleum Ltd's current net income (TTM) was -1,769. Penn West Petroleum Ltd's current cash flow from operations (TTM) was 439. ==> 439 > -1,769 ==> 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: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=1524.46421351/9129.96283294
=0.16697376

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=1827.33148661/12340.1585615
=0.14808007

Penn West Petroleum Ltd's gearing of this year was 0.16697376. Penn West Petroleum Ltd's gearing of last year was 0.14808007. ==> 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: Jun15)=Total Current Assets/Total Current Liabilities
=338.050950263/606.550748079
=0.55733333

Current Ratio (Last Year: Jun14)=Total Current Assets/Total Current Liabilities
=389.658356417/698.984302862
=0.55746367

Penn West Petroleum Ltd's current ratio of this year was 0.55733333. Penn West Petroleum Ltd's current ratio of last year was 0.55746367. ==> 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.

Penn West Petroleum Ltd's number of shares in issue this year was 502.2. Penn West Petroleum Ltd's number of shares in issue last year was 492.6. ==> 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
=748.471474939/1586.59672492
=0.47174651

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1297.25146419/2474.12548216
=0.52432727

Penn West Petroleum Ltd's gross margin of this year was 0.47174651. Penn West Petroleum Ltd's gross margin of last year was 0.52432727. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Jun14)
=1586.59672492/10959.3721145
=0.14477077

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=2474.12548216/14014.5489816
=0.17653979

Penn West Petroleum Ltd's asset turnover of this year was 0.14477077. Penn West Petroleum Ltd's asset turnover of last year was 0.17653979. ==> 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
=0+1+0+1+0+0+0+0+0
=2

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

Penn West Petroleum Ltd has an F-score of 2. It is a bad or low score, which usually implies poor business operation.


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.

Penn West Petroleum Ltd Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 11011100
Question 2 11111111
Question 3 01011000
Question 4 11111111
Question 5 00010111
Question 6 01000100
Question 7 00000000
Question 8 01011010
Question 9 01011001
F-score 37276544

Penn West Petroleum Ltd Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1000000000
Question 2 1111111111
Question 3 0000000000
Question 4 1111111111
Question 5 1111111100
Question 6 1000000000
Question 7 0000000000
Question 8 0011011010
Question 9 0000011100
F-score 5344355432
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