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

The zones of discrimination were as such:

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

Penn West Petroleum Ltd has an F-score of 5 indicating the company's financial situation is typical for a stable company.

PWE' s 10-Year Piotroski F-Score Range
Min: 3   Max: 7
Current: 5

3
7

During the past 13 years, the highest Piotroski F-Score of Penn West Petroleum Ltd was 7. The lowest was 3. 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 26.0617760618 + -638.939670932 + -80.982711556 + 133.147113594 = $-561 Mil.
Cash Flow from Operations was 246.138996139 + 235.831809872 + 202.001819836 + 199.255121043 = $883 Mil.
Revenue was 705.598455598 + 628.884826325 + 573.248407643 + 641.527001862 = $2,549 Mil.
Gross Profit was 352.316602317 + 265.996343693 + 289.353958144 + 394.7858473 = $1,302 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(13893.2692308 + 13688.2239382 + 11269.6526508 + 10971.7925387 + 11051.2104283) / 5 = $12,175 Mil.
Total Assets was $11,051 Mil.
Long-Term Debt was $1,843 Mil.
Total Current Assets was $393 Mil.
Total Current Liabilities was $705 Mil.
Net Income was -67.8824721378 + -102.822580645 + -112.855740922 + -50.9615384615 = $-335 Mil.

Revenue was 695.035460993 + 609.879032258 + 619.23454367 + 749.038461538 = $2,673 Mil.
Gross Profit was 291.79331307 + 146.169354839 + 252.208047105 + 381.730769231 = $1,072 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(15545.3648915 + 16046.6058764 + 14253.0241935 + 14393.5230618 + 13893.2692308) / 5 = $14,826 Mil.
Total Assets was $13,893 Mil.
Long-Term Debt was $2,944 Mil.
Total Current Assets was $563 Mil.
Total Current Liabilities was $813 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Penn West Petroleum Ltd's current net income (ttm) was -561. ==> Negative ==> Score 0.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Penn West Petroleum Ltd's current cash flow from operations (ttm) was 883. ==> 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 (TTM)/Average Total Assets from Jun13 to Jun14
=-560.713492833/12174.8297574
=-0.04605514

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jun12 to Jun13
=-334.522332167/14826.3574508
=-0.02256268

Penn West Petroleum Ltd's return on assets of this year was -0.04605514. Penn West Petroleum Ltd's return on assets of last year was -0.02256268. ==> 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.

Penn West Petroleum Ltd's current net income (ttm) was -561. Penn West Petroleum Ltd's current cash flow from operations (ttm) was 883. ==> 883 > -561 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun14)=Long-Term Debt/Total Assets
=1842.6443203/11051.2104283
=0.16673688

Gearing (Last Year: Jun13)=Long-Term Debt/Total Assets
=2944.23076923/13893.2692308
=0.21191778

Penn West Petroleum Ltd's gearing of this year was 0.16673688. Penn West Petroleum Ltd's gearing of last year was 0.21191778. ==> 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: Jun14)=Total Current Assets/Total Current Liabilities
=392.923649907/704.841713222
=0.55746367

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=562.5/812.5
=0.69230769

Penn West Petroleum Ltd's current ratio of this year was 0.55746367. Penn West Petroleum Ltd's current ratio of last year was 0.69230769. ==> 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 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 492.6. Penn West Petroleum Ltd's number of shares in issue last year was 484.6. ==> 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: TTM)=Gross Profit/Revenue
=1302.45275145/2549.25869143
=0.51091431

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1071.90148424/2673.18749846
=0.40098253

Penn West Petroleum Ltd's gross margin of this year was 0.51091431. Penn West Petroleum Ltd's gross margin of last year was 0.40098253. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout 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)/Average Total Assets from Jun13 to Jun14
=2549.25869143/12174.8297574
=0.20938763

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jun12 to Jun13
=2673.18749846/14826.3574508
=0.18029968

Penn West Petroleum Ltd's asset turnover of this year was 0.20938763. Penn West Petroleum Ltd's asset turnover of last year was 0.18029968. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+1+0+1+1+0+0+1+1
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Penn West Petroleum Ltd has an F-score of 5 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, Altman Z-Score, Beneish M-Score


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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 111101110
Q2 111111111
Q3 00101000
Q4 11111111
Q5 00011010
Q6 10100110
Q7 00000000
Q8 00101101
Q9 01100100
F-score 44736653

Penn West Petroleum Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111000000
Q2 1111111111
Q3 0000000000
Q4 1111111111
Q5 0001111011
Q6 1111100000
Q7 0000000000
Q8 1100000011
Q9 1100000111
F-score 6645433355
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