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Western Digital Piotroski F-Score

: 3 (As of Today)
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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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Western Digital has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

NAS:WDC' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Med: 6   Max: 8
Current: 3
1
8

During the past 13 years, the highest Piotroski F-Score of Western Digital was 8. The lowest was 1. And the median was 6.

Western Digital Piotroski F-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Western Digital Annual Data
Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.00 3.00 6.00 7.00 4.00

Western Digital Quarterly Data
Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 6.00 4.00 4.00 3.00
Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

Western Digital Piotroski F-Score Distribution

* The bar in red indicates where Western Digital's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec19) TTM:Last Year (Dec18) TTM:
Net Income was -581 + -197 + -276 + -139 = $-1,193 Mil.
Cash Flow from Operations was 204 + 169 + 253 + 257 = $883 Mil.
Revenue was 3674 + 3634 + 4040 + 4234 = $15,582 Mil.
Gross Profit was 579 + 465 + 758 + 935 = $2,737 Mil.
Average Total Assets from the begining of this year (Dec18)
to the end of this year (Dec19) was
(27939 + 26913 + 26370 + 26280 + 25860) / 5 = $26672.4 Mil.
Total Assets at the begining of this year (Dec18) was $27,939 Mil.
Long-Term Debt & Capital Lease Obligation was $9,547 Mil.
Total Current Assets was $8,627 Mil.
Total Current Liabilities was $4,482 Mil.		 Net Income was 61 + 756 + 511 + -487 = $841 Mil.

Revenue was 5013 + 5117 + 5028 + 4233 = $19,391 Mil.
Gross Profit was 1927 + 1852 + 1664 + 1044 = $6,487 Mil.
Average Net Income from the begining of last year (Dec17)
to the end of last year (Dec18) was
(29840 + 29004 + 29235 + 28705 + 27939) / 5 = $28944.6 Mil.
Total Assets at the begining of last year (Dec17) was $29,840 Mil.
Long-Term Debt & Capital Lease Obligation was $10,370 Mil.
Total Current Assets was $9,742 Mil.
Total Current Liabilities was $4,350 Mil.

Profitability

Question 1. 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.

Western Digital's current Net Income (TTM) was -1,193. ==> Negative ==> Score 0.

Question 2. 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.

Western Digital's current Cash Flow from Operations (TTM) was 883. ==> Positive ==> Score 1.

Question 3. 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(Dec18)
=-1193/27939
=-0.04270017

ROA (Last Year)=Net Income/Total Assets(Dec17)
=841/29840
=0.02818365

Western Digital's return on assets of this year was -0.04270017. Western Digital's return on assets of last year was 0.02818365. ==> Last year is higher ==> Score 0.

Question 4. 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.

Western Digital's current Net Income (TTM) was -1,193. Western Digital's current Cash Flow from Operations (TTM) was 883. ==> 883 > -1,193 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. 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: Dec19)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Dec18 to Dec19
=9547/26672.4
=0.35793554

Gearing (Last Year: Dec18)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Dec17 to Dec18
=10370/28944.6
=0.35827063

Western Digital's gearing of this year was 0.35793554. Western Digital's gearing of last year was 0.35827063. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. 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: Dec19)=Total Current Assets/Total Current Liabilities
=8627/4482
=1.92481035

Current Ratio (Last Year: Dec18)=Total Current Assets/Total Current Liabilities
=9742/4350
=2.23954023

Western Digital's current ratio of this year was 1.92481035. Western Digital's current ratio of last year was 2.23954023. ==> Last year's current ratio is higher ==> Score 0.

Question 7. 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.

Western Digital's number of shares in issue this year was 298. Western Digital's number of shares in issue last year was 290. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. 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
=2737/15582
=0.17565139

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=6487/19391
=0.33453664

Western Digital's gross margin of this year was 0.17565139. Western Digital's gross margin of last year was 0.33453664. ==> Last year's gross margin is higher ==> Score 0.

Question 9. 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/Total Assets at the Beginning of This Year (Dec18)
=15582/27939
=0.55771502

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Dec17)
=19391/29840
=0.64983244

Western Digital's asset turnover of this year was 0.55771502. Western Digital's asset turnover of last year was 0.64983244. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+0+1+1+0+0+0+0
=3

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

Western Digital has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

Western Digital  (NAS:WDC) Piotroski F-Score 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.

Western Digital Piotroski F-Score Related Terms

Western Digital Piotroski F-Score Headlines

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