Switch to:
ARC Document Solutions Inc (NYSE:ARC)
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

ARC Document Solutions Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

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

4
6

During the past 6 years, the highest Piotroski F-Score of ARC Document Solutions Inc was 6. The lowest was 4. 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 1.396 + -16.01 + -0.45 + 0.722 = $-14.3 Mil.
Cash Flow from Operations was 7.714 + 6.788 + 20.019 + 8.11 = $42.6 Mil.
Revenue was 100.373 + 101.285 + 101.252 + 104.622 = $407.5 Mil.
Gross Profit was 33.934 + 33.467 + 32.88 + 35.611 = $135.9 Mil.
Total Assets at the begining of this year (Mar13) was $421.1 Mil.
Total Assets was $410.8 Mil.
Long-Term Debt was $197.2 Mil.
Total Current Assets was $108.7 Mil.
Total Current Liabilities was $76.1 Mil.
Net Income was 0.415 + -5.896 + -20.112 + -1.053 = $-26.6 Mil.

Revenue was 100.036 + 96.891 + 99.426 + 106.228 = $402.6 Mil.
Gross Profit was 32.379 + 28.64 + 29.248 + 33.753 = $124.0 Mil.
Total Assets at the begining of last year (Mar12) was $448.5 Mil.
Total Assets was $421.1 Mil.
Long-Term Debt was $208.1 Mil.
Total Current Assets was $111.6 Mil.
Total Current Liabilities was $68.9 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.

ARC Document Solutions Inc's current net income was -14.3. ==> 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.

ARC Document Solutions Inc's current cash flow from operations was 42.6. ==> 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 (Mar13)
=-14.342/421.102
=-0.03405826

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=-26.646/448.452
=-0.05941773

ARC Document Solutions Inc's return on assets of this year was -0.03405826. ARC Document Solutions Inc's return on assets of last year was -0.05941773. ==> 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.

ARC Document Solutions Inc's current net income was -14.3. ARC Document Solutions Inc's current cash flow from operations was 42.6. ==> 42.6 > -14.3 ==> 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
=197.197/410.776
=0.48005969

Gearing (Last Year)=Long-Term Debt/Total Assets
=208.124/421.102
=0.49423655

ARC Document Solutions Inc's gearing of this year was 0.48005969. ARC Document Solutions Inc's gearing of last year was 0.49423655. ==> 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
=108.65/76.129
=1.42718281

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=111.638/68.86
=1.62123148

ARC Document Solutions Inc's current ratio of this year was 1.42718281. ARC Document Solutions Inc's current ratio of last year was 1.62123148. ==> 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.

ARC Document Solutions Inc's number of shares in issue this year was 46.8. ARC Document Solutions Inc's number of shares in issue last year was 45.8. ==> 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
=135.892/407.532
=0.33345112

Gross Margin (Last Year)=Gross Profit/Revenue
=124.02/402.581
=0.30806223

ARC Document Solutions Inc's gross margin of this year was 0.33345112. ARC Document Solutions Inc's gross margin of last year was 0.30806223. ==> 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 (Mar13)
=407.532/421.102
=0.96777503

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=402.581/448.452
=0.89771258

ARC Document Solutions Inc's asset turnover of this year was 0.96777503. ARC Document Solutions Inc's asset turnover of last year was 0.89771258. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

ARC Document Solutions Inc 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.

ARC Document Solutions Inc Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13
Q1 00
Q2 11
Q3 11
Q4 11
Q5 01
Q6 10
Q7 00
Q8 01
Q9 11
F-score 56

ARC Document Solutions Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 000000000
Q2 111111111
Q3 011111111
Q4 111111111
Q5 000000111
Q6 111111000
Q7 000000000
Q8 010000111
Q9 111111111
F-score 4465555666
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide