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Abercrombie & Fitch Company (NYSE:ANF)
Piotroski F-Score
8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

The zones of discrimination were as such:

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

Abercrombie & Fitch Company has an F-score of 5 indicating the company's financial situation is typical for a stable company.

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

3
8

During the past 13 years, the highest Piotroski F-Score of Abercrombie & Fitch Company 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 (Jan14) TTM:Last Year (Jan13) TTM:
Net Income was 66.105 + -15.644 + 11.37 + -7.203 = $55 Mil.
Cash Flow from Operations was 405.654 + -21.441 + -65.091 + -143.629 = $175 Mil.
Revenue was 1299.137 + 1033.293 + 945.698 + 838.769 = $4,117 Mil.
Gross Profit was 767.106 + 651.04 + 604.122 + 553.166 = $2,575 Mil.
Total Assets at the begining of this year (Jan13) was $2,987 Mil.
Total Assets was $2,851 Mil.
Long-Term Debt was $181 Mil.
Total Current Assets was $1,321 Mil.
Total Current Liabilities was $568 Mil.
Net Income was 157.229 + 84.036 + 17.051 + -21.305 = $237 Mil.

Revenue was 1468.531 + 1169.649 + 951.407 + 921.218 = $4,511 Mil.
Gross Profit was 930.653 + 752.514 + 592.451 + 541.092 = $2,817 Mil.
Total Assets at the begining of last year (Jan12) was $3,117 Mil.
Total Assets was $2,987 Mil.
Long-Term Debt was $64 Mil.
Total Current Assets was $1,308 Mil.
Total Current Liabilities was $691 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.

Abercrombie & Fitch Company's current net income was 55. ==> 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.

Abercrombie & Fitch Company's current cash flow from operations was 175. ==> 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 (Jan13)
=54.628/2987.401
=0.01828613

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jan12)
=237.011/3117.032
=0.0760374

Abercrombie & Fitch Company's return on assets of this year was 0.01828613. Abercrombie & Fitch Company's return on assets of last year was 0.0760374. ==> 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.

Abercrombie & Fitch Company's current net income was 55. Abercrombie & Fitch Company's current cash flow from operations was 175. ==> 175 > 55 ==> 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
=180.726/2850.997
=0.06339046

Gearing (Last Year)=Long-Term Debt/Total Assets
=63.942/2987.401
=0.02140389

Abercrombie & Fitch Company's gearing of this year was 0.06339046. Abercrombie & Fitch Company's gearing of last year was 0.02140389. ==> 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
=1320.566/568.222
=2.3240318

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1307.824/690.801
=1.89319934

Abercrombie & Fitch Company's current ratio of this year was 2.3240318. Abercrombie & Fitch Company's current ratio of last year was 1.89319934. ==> 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.

Abercrombie & Fitch Company's number of shares in issue this year was 82.5. Abercrombie & Fitch Company's number of shares in issue last year was 80.6. ==> 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
=2575.434/4116.897
=0.6255765

Gross Margin (Last Year)=Gross Profit/Revenue
=2816.71/4510.805
=0.62443621

Abercrombie & Fitch Company's gross margin of this year was 0.6255765. Abercrombie & Fitch Company's gross margin of last year was 0.62443621. ==> 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 (Jan13)
=4116.897/2987.401
=1.3780865

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jan12)
=4510.805/3117.032
=1.44714748

Abercrombie & Fitch Company's asset turnover of this year was 1.3780865. Abercrombie & Fitch Company's asset turnover of last year was 1.44714748. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+1+0+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Abercrombie & Fitch Company 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.


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.

Abercrombie & Fitch Company Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111111111
Q2 1111111111
Q3 0100001010
Q4 1111111111
Q5 0000011100
Q6 0110110001
Q7 1101110111
Q8 1111000011
Q9 0100001110
F-score 5855566676

Abercrombie & Fitch Company Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Q1 1111111111
Q2 1111111111
Q3 1000011110
Q4 1111111111
Q5 1110000000
Q6 0000001111
Q7 1111111110
Q8 0000011111
Q9 1111111110
F-score 7665578880
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