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WPP PLC  (OTCPK:WPPGF) 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

WPP PLC has an F-score of 5 indicating the company's financial situation is typical for a stable company.

OTCPK:WPPGF' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 8
Current: 6

4
8

During the past 13 years, the highest Piotroski F-Score of WPP PLC was 8. The lowest was 4. And the median was 6.


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.

WPP PLC Annual Data

Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 5.00 6.00 5.00 6.00

WPP PLC Semi-Annual Data

Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18
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 0.00 5.00 0.00 6.00

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.


WPP PLC Distribution

* The bar in red indicates where WPP PLC'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 (Dec18) TTM:Last Year (Dec17) TTM:
Net Income was $1,345 Mil.
Cash Flow from Operations was $2,144 Mil.
Revenue was $19,750 Mil.
Gross Profit was $3,720 Mil.
Average Total Assets from the begining of this year (Dec17)
to the end of this year (Dec18) was (45124.3967828 + 42870.5063291) / 2 = $43997.451556 Mil.
Total Assets at the begining of this year (Dec17) was $45,124 Mil.
Long-Term Debt & Capital Lease Obligation was $7,133 Mil.
Total Current Assets was $20,182 Mil.
Total Current Liabilities was $21,025 Mil.
Net Income was $2,435 Mil.

Revenue was $21,185 Mil.
Gross Profit was $4,256 Mil.
Average Net Income from the begining of last year (Dec16)
to the end of last year (Dec17) was (43156.4294632 + 45124.3967828) / 2 = $44140.413123 Mil.
Total Assets at the begining of last year (Dec16) was $43,156 Mil.
Long-Term Debt & Capital Lease Obligation was $8,379 Mil.
Total Current Assets was $20,317 Mil.
Total Current Liabilities was $20,797 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.

WPP PLC's current Net Income (TTM) was 1,345. ==> Positive ==> Score 1.

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.

WPP PLC's current Cash Flow from Operations (TTM) was 2,144. ==> 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(Dec17)
=1345.44303797/45124.3967828
=0.02981631

ROA (Last Year)=Net Income/Total Assets(Dec16)
=2435.12064343/43156.4294632
=0.05642544

WPP PLC's return on assets of this year was 0.02981631. WPP PLC's return on assets of last year was 0.05642544. ==> 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.

WPP PLC's current Net Income (TTM) was 1,345. WPP PLC's current Cash Flow from Operations (TTM) was 2,144. ==> 2,144 > 1,345 ==> 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: Dec18)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Dec17 to Dec18
=7132.65822785/43997.451556
=0.16211526

Gearing (Last Year: Dec17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Dec16 to Dec17
=8378.55227882/44140.413123
=0.1898159

WPP PLC's gearing of this year was 0.16211526. WPP PLC's gearing of last year was 0.1898159. ==> 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: Dec18)=Total Current Assets/Total Current Liabilities
=20181.5189873/21024.556962
=0.95990222

Current Ratio (Last Year: Dec17)=Total Current Assets/Total Current Liabilities
=20317.4262735/20796.9168901
=0.97694415

WPP PLC's current ratio of this year was 0.95990222. WPP PLC's current ratio of last year was 0.97694415. ==> 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.

WPP PLC's number of shares in issue this year was 1261.2. WPP PLC's number of shares in issue last year was 1275.8. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=3720.12658228/19749.8734177
=0.18836205

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=4256.3002681/21185.2546917
=0.20090862

WPP PLC's gross margin of this year was 0.18836205. WPP PLC's gross margin of last year was 0.20090862. ==> 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 (Dec17)
=19749.8734177/45124.3967828
=0.43767618

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Dec16)
=21185.2546917/43156.4294632
=0.49089452

WPP PLC's asset turnover of this year was 0.43767618. WPP PLC's asset turnover of last year was 0.49089452. ==> 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
=1+1+0+1+1+0+1+0+0
=5

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

WPP PLC has an F-score of 5 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.


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