Switch to:
Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
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

Taiwan Semiconductor Manufacturing Co Ltd has an F-score of 6 indicating the company's financial situation is typical for a stable company.

TSM' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of Taiwan Semiconductor Manufacturing Co Ltd was 9. The lowest was 3. And the median was 6.


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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 1367.32685126 + 1574.69555921 + 1990.73971324 + 2533.44518934 = $7,466 Mil.
Cash Flow from Operations was 3457.69488275 + 3120.42569079 + 2725.87072357 + 3028.27918091 = $12,332 Mil.
Revenue was 4906.93008781 + 4876.19042763 + 6102.57135712 + 6937.92200724 = $22,824 Mil.
Gross Profit was 2196.21145241 + 2315.79263158 + 3040.77775925 + 3503.97809565 = $11,057 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(39750.8765149 + 42485.6407496 + 42721.686875 + 44849.7754918 + 44804.1830673) / 5 = $42922.4325397 Mil.
Total Assets at the begining of this year (Sep13) was $39,751 Mil.
Long-Term Debt was $7,056 Mil.
Total Current Assets was $15,805 Mil.
Total Current Liabilities was $5,717 Mil.
Net Income was 1196.97689792 + 1330.53877963 + 1731.02091617 + 1753.7704824 = $6,012 Mil.

Revenue was 4525.55982097 + 4463.22191965 + 5208.65067326 + 5486.5231408 = $19,684 Mil.
Gross Profit was 2137.74532622 + 2043.0260548 + 2553.44936349 + 2663.16075347 = $9,397 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(30050.5983173 + 33098.4231365 + 35691.0312994 + 39088.6917037 + 39750.8765149) / 5 = $35535.9241943 Mil.
Total Assets at the begining of last year (Sep12) was $30,051 Mil.
Long-Term Debt was $7,130 Mil.
Total Current Assets was $11,417 Mil.
Total Current Liabilities was $5,006 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.

Taiwan Semiconductor Manufacturing Co Ltd's current net income (TTM) was 7,466. ==> 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.

Taiwan Semiconductor Manufacturing Co Ltd's current cash flow from operations (TTM) was 12,332. ==> 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)/Total Assets at the Beginning of This Year (Sep13)
=7466.20731305/39750.8765149
=0.18782497

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=6012.30707611/30050.5983173
=0.20007279

Taiwan Semiconductor Manufacturing Co Ltd's return on assets of this year was 0.18782497. Taiwan Semiconductor Manufacturing Co Ltd's return on assets of last year was 0.20007279. ==> 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.

Taiwan Semiconductor Manufacturing Co Ltd's current net income (TTM) was 7,466. Taiwan Semiconductor Manufacturing Co Ltd's current cash flow from operations (TTM) was 12,332. ==> 12,332 > 7,466 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=7056.20616641/42922.4325397
=0.16439437

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=7130.10721399/35535.9241943
=0.20064505

Taiwan Semiconductor Manufacturing Co Ltd's gearing of this year was 0.16439437. Taiwan Semiconductor Manufacturing Co Ltd's gearing of last year was 0.20064505. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=15805.3233879/5716.6428927
=2.7647911

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=11417.1703406/5005.71137292
=2.28082874

Taiwan Semiconductor Manufacturing Co Ltd's current ratio of this year was 2.7647911. Taiwan Semiconductor Manufacturing Co Ltd's current ratio of last year was 2.28082874. ==> 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.

Taiwan Semiconductor Manufacturing Co Ltd's number of shares in issue this year was 5186. Taiwan Semiconductor Manufacturing Co Ltd's number of shares in issue last year was 5185.9. ==> 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
=11056.7599389/22823.6138798
=0.48444387

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=9397.38149798/19683.9555547
=0.47741327

Taiwan Semiconductor Manufacturing Co Ltd's gross margin of this year was 0.48444387. Taiwan Semiconductor Manufacturing Co Ltd's gross margin of last year was 0.47741327. ==> 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 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 (Sep13)
=22823.6138798/39750.8765149
=0.5741663

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=19683.9555547/30050.5983173
=0.65502708

Taiwan Semiconductor Manufacturing Co Ltd's asset turnover of this year was 0.5741663. Taiwan Semiconductor Manufacturing Co Ltd's asset turnover of last year was 0.65502708. ==> 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+1+1+1+0+1+0
=6

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

Taiwan Semiconductor Manufacturing Co Ltd 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.

Taiwan Semiconductor Manufacturing Co Ltd Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1010001010
Q4 1111111111
Q5 1111010100
Q6 0101000001
Q7 1000110000
Q8 1010011010
Q9 1010101010
F-score 8575566464

Taiwan Semiconductor Manufacturing Co Ltd Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 0011100000
Q4 1111111111
Q5 0000000011
Q6 1100111111
Q7 0000000000
Q8 0111110011
Q9 0011110000
F-score 4666764466
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK