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Westell Technologies, Inc. (NAS:WSTL)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

The zones of discrimination were as such:

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

Westell Technologies, Inc. has an F-score of 3 indicating the company's financial situation is typical for a stable company.

WSTL' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 3

1
8

During the past 13 years, the highest Piotroski F-Score of Westell Technologies, Inc. was 8. The lowest was 1. And the median was 4.


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 (Dec13) TTM:Last Year (Dec12) TTM:
Net Income was 1.925 + 1.328 + -2.764 + -38.158 = $-37.67 Mil.
Cash Flow from Operations was 5.018 + -1.219 + -3.108 + -3.92 = $-3.23 Mil.
Revenue was 25.236 + 29.96 + 22.456 + 11.899 = $89.55 Mil.
Gross Profit was 12.235 + 12.423 + 8.776 + 5.012 = $38.45 Mil.
Total Assets at the begining of this year (Dec12) was $184.32 Mil.
Total Assets was $149.92 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $122.74 Mil.
Total Current Liabilities was $14.03 Mil.
Net Income was -1.965 + -2.175 + -1.74 + -2.448 = $-8.33 Mil.

Revenue was 8.873 + 9.854 + 9.418 + 11.334 = $39.48 Mil.
Gross Profit was 3.09 + 3.449 + 2.773 + 4.407 = $13.72 Mil.
Total Assets at the begining of last year (Dec11) was $208.33 Mil.
Total Assets was $184.32 Mil.
Long-Term Debt was $0.00 Mil.
Total Current Assets was $140.79 Mil.
Total Current Liabilities was $8.67 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.

Westell Technologies, Inc.'s current net income was -37.67. ==> Negative ==> Score 0.

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.

Westell Technologies, Inc.'s current cash flow from operations was -3.23. ==> Negative ==> Score 0.

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/Total Assets at the beginning of this year (Dec12)
=-37.669/184.319
=-0.20436851

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=-8.328/208.332
=-0.03997466

Westell Technologies, Inc.'s return on assets of this year was -0.20436851. Westell Technologies, Inc.'s return on assets of last year was -0.03997466. ==> 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.

Westell Technologies, Inc.'s current net income was -37.67. Westell Technologies, Inc.'s current cash flow from operations was -3.23. ==> -3.23 > -37.67 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=0/149.918
=0

Gearing (Last Year)=Long-Term Debt/Total Assets
=0/184.319
=0

Westell Technologies, Inc.'s gearing of this year was 0. Westell Technologies, Inc.'s gearing of last year was 0. ==> Last year is lower ==> 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)=Total Current Assets/Total Current Liabilities
=122.744/14.029
=8.74930501

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=140.789/8.668
=16.24238579

Westell Technologies, Inc.'s current ratio of this year was 8.74930501. Westell Technologies, Inc.'s current ratio of last year was 16.24238579. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Westell Technologies, Inc.'s number of shares in issue this year was 60.7. Westell Technologies, Inc.'s number of shares in issue last year was 58.7. ==> There is more 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)=Gross Profit/Revenue
=38.446/89.551
=0.42931961

Gross Margin (Last Year)=Gross Profit/Revenue
=13.719/39.479
=0.3475012

Westell Technologies, Inc.'s gross margin of this year was 0.42931961. Westell Technologies, Inc.'s gross margin of last year was 0.3475012. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Dec12)
=89.551/184.319
=0.4858479

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=39.479/208.332
=0.18950041

Westell Technologies, Inc.'s asset turnover of this year was 0.4858479. Westell Technologies, Inc.'s asset turnover of last year was 0.18950041. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+0+0+1+0+0+0+1+1
=3

Good or high score = 8 or 9

Bad or low score = 0 or 1

Westell Technologies, Inc. has an F-score of 3 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.

Westell Technologies, Inc. Annual Data

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
Q1 1111001110
Q2 1111001100
Q3 1000011100
Q4 0011111001
Q5 1101000001
Q6 1110101010
Q7 0001111011
Q8 1011001011
Q9 1000011000
F-score 7456348344

Westell Technologies, Inc. Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111100000
Q2 1000000000
Q3 1100000000
Q4 0000001111
Q5 0001000000
Q6 1111100000
Q7 0111111110
Q8 0011111111
Q9 0000000011
F-score 4445423343
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