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Williams Companies Inc (NYSE:WMB)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

Williams Companies Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.

WMB' s 10-Year Piotroski F-Score Range
Min: 2   Max: 8
Current: 4

2
8

During the past 13 years, the highest Piotroski F-Score of Williams Companies 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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 141 + -14 + 140 + 103 = $370 Mil.
Cash Flow from Operations was 539 + 515 + 446 + 313 = $1,813 Mil.
Revenue was 1623 + 1660 + 1749 + 1678 = $6,710 Mil.
Gross Profit was 644 + 657 + 682 + 954 = $2,937 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(25657 + 26455 + 27142 + 28306 + 34949) / 5 = $28,502 Mil.
Total Assets was $34,949 Mil.
Long-Term Debt was $15,539 Mil.
Total Current Assets was $2,119 Mil.
Total Current Liabilities was $2,396 Mil.
Net Income was 155 + 149 + 161 + 142 = $607 Mil.

Revenue was 1752 + 1869 + 1810 + 1767 = $7,198 Mil.
Gross Profit was 720 + 740 + 760 + 966 = $3,186 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(20267 + 21263 + 24327 + 24816 + 25657) / 5 = $23,266 Mil.
Total Assets was $25,657 Mil.
Long-Term Debt was $10,359 Mil.
Total Current Assets was $1,946 Mil.
Total Current Liabilities was $2,371 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.

Williams Companies Inc's current net income (ttm) was 370. ==> Positive ==> Score 1.

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.

Williams Companies Inc's current cash flow from operations (ttm) was 1,813. ==> 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
=370/28501.8
=0.01298164

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jun12 to Jun13
=607/23266
=0.02608957

Williams Companies Inc's return on assets of this year was 0.01298164. Williams Companies Inc's return on assets of last year was 0.02608957. ==> 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.

Williams Companies Inc's current net income (ttm) was 370. Williams Companies Inc's current cash flow from operations (ttm) was 1,813. ==> 1,813 > 370 ==> 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
=15539/34949
=0.4446193

Gearing (Last Year: Jun13)=Long-Term Debt/Total Assets
=10359/25657
=0.40374946

Williams Companies Inc's gearing of this year was 0.4446193. Williams Companies Inc's gearing of last year was 0.40374946. ==> Last year is lower than this year ==> Score 0.

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
=2119/2396
=0.88439065

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=1946/2371
=0.82075074

Williams Companies Inc's current ratio of this year was 0.88439065. Williams Companies Inc's current ratio of last year was 0.82075074. ==> 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.

Williams Companies Inc's number of shares in issue this year was 700.7. Williams Companies Inc's number of shares in issue last year was 686.9. ==> 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
=2937/6710
=0.43770492

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3186/7198
=0.44262295

Williams Companies Inc's gross margin of this year was 0.43770492. Williams Companies Inc's gross margin of last year was 0.44262295. ==> Last year's gross margin is higher ==> Score 0.

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
=6710/28501.8
=0.23542373

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jun12 to Jun13
=7198/23266
=0.30937849

Williams Companies Inc's asset turnover of this year was 0.23542373. Williams Companies Inc's asset turnover of last year was 0.30937849. ==> 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+0+1+0+0+0
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

Williams Companies Inc has an F-score of 4 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.

Williams Companies Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111110111
Q2 1111111111
Q3 1101100110
Q4 1111111111
Q5 1100100011
Q6 0010110110
Q7 0000110000
Q8 0000011111
Q9 0000100100
F-score 5544863775

Williams Companies Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1101111000
Q4 1111111111
Q5 0001111110
Q6 1111000001
Q7 0000000000
Q8 1001010110
Q9 1111000000
F-score 7658676554
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