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Willis Group Holdings PLC (NYSE:WSH)
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

Willis Group Holdings PLC has an F-score of 6 indicating the company's financial situation is typical for a stable company.

WSH' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 6

3
8

During the past 13 years, the highest Piotroski F-Score of Willis Group Holdings PLC was 8. 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 68 + 246 + 47 + -7 = $354 Mil.
Cash Flow from Operations was 195 + 5 + 147 + 129 = $476 Mil.
Revenue was 919 + 1097 + 935 + 812 = $3,763 Mil.
Gross Profit was 919 + 1097 + 935 + 812 = $3,763 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(15323 + 14800 + 15828 + 16551 + 15208) / 5 = $15542 Mil.
Total Assets at the begining of this year (Sep13) was $15,323 Mil.
Long-Term Debt was $2,148 Mil.
Total Current Assets was $10,824 Mil.
Total Current Liabilities was $10,005 Mil.
Net Income was -805 + 219 + 105 + -27 = $-508 Mil.

Revenue was 871 + 1051 + 890 + 795 = $3,607 Mil.
Gross Profit was 871 + 1051 + 890 + 795 = $3,607 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(17003 + 15112 + 15802 + 15938 + 15323) / 5 = $15835.6 Mil.
Total Assets at the begining of last year (Sep12) was $17,003 Mil.
Long-Term Debt was $2,339 Mil.
Total Current Assets was $11,014 Mil.
Total Current Liabilities was $10,135 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.

Willis Group Holdings PLC's current net income (TTM) was 354. ==> 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.

Willis Group Holdings PLC's current cash flow from operations (TTM) was 476. ==> 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 (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=-508/17003
=-0.02987708

Willis Group Holdings PLC's return on assets of this year was 0.02310253. Willis Group Holdings PLC's return on assets of last year was -0.02987708. ==> This year is higher. ==> Score 1.

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.

Willis Group Holdings PLC's current net income (TTM) was 354. Willis Group Holdings PLC's current cash flow from operations (TTM) was 476. ==> 476 > 354 ==> 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
=2148/15542
=0.13820615

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=2339/15835.6
=0.14770517

Willis Group Holdings PLC's gearing of this year was 0.13820615. Willis Group Holdings PLC's gearing of last year was 0.14770517. ==> 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
=10824/10005
=1.08185907

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=11014/10135
=1.08672916

Willis Group Holdings PLC's current ratio of this year was 1.08185907. Willis Group Holdings PLC's current ratio of last year was 1.08672916. ==> 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.

Willis Group Holdings PLC's number of shares in issue this year was 178. Willis Group Holdings PLC's number of shares in issue last year was 177. ==> 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
=3763/3763
=1

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3607/3607
=1

Willis Group Holdings PLC's gross margin of this year was 1. Willis Group Holdings PLC's gross margin of last year was 1. ==> 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 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)
=3763/15323
=0.24557854

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=3607/17003
=0.21213903

Willis Group Holdings PLC's asset turnover of this year was 0.24557854. Willis Group Holdings PLC's asset turnover of last year was 0.21213903. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+1+0+0+0+1
=6

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

Willis Group Holdings PLC 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.

Willis Group Holdings PLC Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111101
Q2 1111111111
Q3 0010011001
Q4 0000001111
Q5 0000000000
Q6 0010011101
Q7 1111000010
Q8 0000000000
Q9 1010101111
F-score 4363346546

Willis Group Holdings PLC Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1100001111
Q2 1111111111
Q3 1100001111
Q4 1111111111
Q5 0010000001
Q6 1100001110
Q7 1111000000
Q8 0000000000
Q9 0011111111
F-score 6654336666
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