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American Realty Investors Inc (NYSE:ARL)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, 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

American Realty Investors Inc has an F-score of 7 indicating the company's financial situation is typical for a stable company.

ARL' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 7

1
8

During the past 13 years, the highest Piotroski F-Score of American Realty Investors Inc was 8. The lowest was 1. And the median was 4.


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 3.55 + 38.974 + -6.426 + 8.354 = $44.5 Mil.
Cash Flow from Operations was -15.187 + -29.228 + -0.333 + -2.674 = $-47.4 Mil.
Revenue was 20.583 + 8.181 + 27.482 + 27.182 = $83.4 Mil.
Gross Profit was 10.266 + 4.185 + 13.44 + 14.638 = $42.5 Mil.
Total Assets at the begining of this year (Mar13) was $1,090.4 Mil.
Total Assets was $940.2 Mil.
Long-Term Debt was $666.1 Mil.
Total Current Assets was $80.9 Mil.
Total Current Liabilities was $135.5 Mil.
Net Income was 0.374 + -4.512 + 0.564 + 4.665 = $1.1 Mil.

Revenue was 20.35 + 8.403 + 27.771 + 27.284 = $83.8 Mil.
Gross Profit was 10.368 + 3.907 + 13.877 + 14.031 = $42.2 Mil.
Total Assets at the begining of last year (Mar12) was $1,181.7 Mil.
Total Assets was $1,090.4 Mil.
Long-Term Debt was $848.6 Mil.
Total Current Assets was $8.3 Mil.
Total Current Liabilities was $157.4 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.

American Realty Investors Inc's current net income was 44.5. ==> 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.

American Realty Investors Inc's current cash flow from operations was -47.4. ==> Negative ==> Score 0.

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)
=44.452/1090.419
=0.04076598

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=1.091/1181.654
=0.00092328

American Realty Investors Inc's return on assets of this year was 0.04076598. American Realty Investors Inc's return on assets of last year was 0.00092328. ==> 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.

American Realty Investors Inc's current net income was 44.5. American Realty Investors Inc's current cash flow from operations was -47.4. ==> -47.4 =< 44.5 ==> CFROA =< ROA ==> Score 0.

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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year)=Long-Term Debt/Total Assets
=666.072/940.156
=0.70846966

Gearing (Last Year)=Long-Term Debt/Total Assets
=848.624/1090.419
=0.77825496

American Realty Investors Inc's gearing of this year was 0.70846966. American Realty Investors Inc's gearing of last year was 0.77825496. ==> This year is lower or equal to last year. ==> 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
=80.871/135.548
=0.5966226

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=8.262/157.397
=0.05249147

American Realty Investors Inc's current ratio of this year was 0.5966226. American Realty Investors Inc's current ratio of last year was 0.05249147. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

American Realty Investors Inc's number of shares in issue this year was 11.5. American Realty Investors Inc's number of shares in issue last year was 11.5. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=42.529/83.428
=0.5097689

Gross Margin (Last Year)=Gross Profit/Revenue
=42.183/83.808
=0.50332904

American Realty Investors Inc's gross margin of this year was 0.5097689. American Realty Investors Inc's gross margin of last year was 0.50332904. ==> 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)
=83.428/1090.419
=0.07651004

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=83.808/1181.654
=0.07092431

American Realty Investors Inc's asset turnover of this year was 0.07651004. American Realty Investors Inc's asset turnover of last year was 0.07092431. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+0+1+0+1+1+1+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

American Realty Investors Inc has an F-score of 7 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.

American Realty Investors Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111100101
Q2 0100100100
Q3 1101000101
Q4 0000111100
Q5 1100100101
Q6 0001001111
Q7 1010001001
Q8 0011011111
Q9 0111000111
F-score 4545424837

American Realty Investors Inc Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1100011011
Q2 1111000000
Q3 1111001111
Q4 1111000000
Q5 1111011111
Q6 1010110111
Q7 0011111111
Q8 1100111111
Q9 1111100001
F-score 8776455567
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