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Arkansas Best Corp (NAS:ABFS)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

Arkansas Best Corp has an F-score of 6 indicating the company's financial situation is typical for a stable company.

ABFS' s 10-Year Piotroski F-Score Range
Min: 4   Max: 7
Current: 6

4
7

During the past 13 years, the highest Piotroski F-Score of Arkansas Best Corp was 7. The lowest was 4. And the median was 6.


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 10.346 + 13.982 + 4.878 + -13.395 = $16 Mil.
Cash Flow from Operations was 27.253 + 38.319 + 28.146 + -0.214 = $94 Mil.
Revenue was 578.55 + 623.414 + 576.899 + 520.687 = $2,300 Mil.
Gross Profit was 150.277 + 388.399 + 393.026 + 346.86 = $1,279 Mil.
Total Assets at the begining of this year (Dec12) was $1,034 Mil.
Total Assets was $1,017 Mil.
Long-Term Debt was $81 Mil.
Total Current Assets was $418 Mil.
Total Current Liabilities was $310 Mil.
Net Income was -7.929 + 6.518 + 11.841 + -18.162 = $-8 Mil.

Revenue was 537.043 + 577.546 + 510.543 + 440.867 = $2,066 Mil.
Gross Profit was 151.754 + 367.18 + 369.096 + 316.21 = $1,204 Mil.
Total Assets at the begining of last year (Dec11) was $916 Mil.
Total Assets was $1,034 Mil.
Long-Term Debt was $113 Mil.
Total Current Assets was $386 Mil.
Total Current Liabilities was $300 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.

Arkansas Best Corp's current net income was 16. ==> 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.

Arkansas Best Corp's current cash flow from operations was 94. ==> 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/Total Assets at the beginning of this year (Dec12)
=15.811/1034.462
=0.01528427

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Dec11)
=-7.732/916.22
=-0.00843902

Arkansas Best Corp's return on assets of this year was 0.01528427. Arkansas Best Corp's return on assets of last year was -0.00843902. ==> 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.

Arkansas Best Corp's current net income was 16. Arkansas Best Corp's current cash flow from operations was 94. ==> 94 > 16 ==> 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
=81.332/1017.326
=0.07994684

Gearing (Last Year)=Long-Term Debt/Total Assets
=112.941/1034.462
=0.10917849

Arkansas Best Corp's gearing of this year was 0.07994684. Arkansas Best Corp's gearing of last year was 0.10917849. ==> This year is lower. ==> 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)=Total Current Assets/Total Current Liabilities
=418.485/309.617
=1.35162152

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=386.05/299.708
=1.28808707

Arkansas Best Corp's current ratio of this year was 1.35162152. Arkansas Best Corp's current ratio of last year was 1.28808707. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Arkansas Best Corp's number of shares in issue this year was 25.8. Arkansas Best Corp's number of shares in issue last year was 25.7. ==> 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
=1278.562/2299.55
=0.55600531

Gross Margin (Last Year)=Gross Profit/Revenue
=1204.24/2065.999
=0.58288508

Arkansas Best Corp's gross margin of this year was 0.55600531. Arkansas Best Corp's gross margin of last year was 0.58288508. ==> Last year's gross margin is higher ==> Score 0.

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)
=2299.55/1034.462
=2.22294294

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Dec11)
=2065.999/916.22
=2.25491585

Arkansas Best Corp's asset turnover of this year was 2.22294294. Arkansas Best Corp's asset turnover of last year was 2.25491585. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Arkansas Best Corp 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.

Arkansas Best Corp Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111100101
Q2 1111111111
Q3 1100001101
Q4 1111111111
Q5 0110000001
Q6 1111101001
Q7 0011010000
Q8 1001001000
Q9 1000001110
F-score 7666436536

Arkansas Best Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Q1 1111100001
Q2 1111111111
Q3 1111000001
Q4 1111111111
Q5 0010000111
Q6 0000000111
Q7 0000000000
Q8 1011111000
Q9 1111111000
F-score 6576544446
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