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ARRIS Group Inc (NAS:ARRS)
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

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

ARRS' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 7

3
9

During the past 13 years, the highest Piotroski F-Score of ARRIS Group Inc was 9. 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was -2.817 + 40.8 + 39.024 + 54.626 = $132 Mil.
Cash Flow from Operations was 190.648 + 34.848 + 220.308 + 81.935 = $528 Mil.
Revenue was 1199.067 + 1225.017 + 1429.071 + 1405.445 = $5,259 Mil.
Gross Profit was 366.371 + 346.774 + 419.412 + 435.734 = $1,568 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(4585.954 + 4322.007 + 4345.029 + 4330.82 + 4305.244) / 5 = $4,378 Mil.
Total Assets as of Sep13 was $4,586 Mil.
Long-Term Debt was $1,488 Mil.
Total Current Assets was $1,848 Mil.
Total Current Liabilities was $1,122 Mil.
Net Income was 14.795 + -14.65 + -48.463 + 17.169 = $-31 Mil.

Revenue was 344.003 + 353.65 + 1000.362 + 1067.824 = $2,766 Mil.
Gross Profit was 123.191 + 108.526 + 230.957 + 316.895 = $780 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(1382.695 + 1405.894 + 1467.566 + 4935.209 + 4585.954) / 5 = $2,755 Mil.
Total Assets as of Sep12 was $1,383 Mil.
Long-Term Debt was $1,823 Mil.
Total Current Assets was $1,865 Mil.
Total Current Liabilities was $1,247 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

ARRIS Group Inc's current net income (ttm) was 132. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by beginning of the year total assets.

Score 1 if positive, 0 if negative.

ARRIS Group Inc's current cash flow from operations (ttm) was 528. ==> 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 (TTM)/Beginning of This Year Total Assets (Sep13)
=131.633/4585.954
=0.02870352

ROA (Last Year)=Net Income (TTM)/Beginning of Last Year Total Assets (Sep12)
=-31.149/1382.695
=-0.02252774

ARRIS Group Inc's return on assets of this year was 0.02870352. ARRIS Group Inc's return on assets of last year was -0.02252774. ==> 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.

ARRIS Group Inc's current net income (ttm) was 132. ARRIS Group Inc's current cash flow from operations (ttm) was 528. ==> 528 > 132 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=1487.585/4377.8108
=0.33980112

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=1822.941/2755.4636
=0.66157325

ARRIS Group Inc's gearing of this year was 0.33980112. ARRIS Group Inc's gearing of last year was 0.66157325. ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=1848.388/1121.934
=1.64750155

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=1865.029/1247.213
=1.49535725

ARRIS Group Inc's current ratio of this year was 1.64750155. ARRIS Group Inc's current ratio of last year was 1.49535725. ==> 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.

ARRIS Group Inc's number of shares in issue this year was 148.8. ARRIS Group Inc's number of shares in issue last year was 140.6. ==> There is larger 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: TTM)=Gross Profit/Revenue
=1568.291/5258.6
=0.29823356

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=779.569/2765.839
=0.28185625

ARRIS Group Inc's gross margin of this year was 0.29823356. ARRIS Group Inc's gross margin of last year was 0.28185625. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by begining of the year total assets) 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 (TTM)/Beginning of This Year Total Assets (Sep13)
=5258.6/4585.954
=1.14667526

Asset Turnover (Last Year)=Revenue (TTM)/Beginning of Last Year Total Assets (Sep12)
=2765.839/1382.695
=2.00032473

ARRIS Group Inc's asset turnover of this year was 1.14667526. ARRIS Group Inc's asset turnover of last year was 2.00032473. ==> 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+1+0
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

ARRIS Group 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, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

ARRIS Group Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 0111011010
Q2 1111111111
Q3 1110010010
Q4 1010111111
Q5 1101111010
Q6 0110111000
Q7 0000000110
Q8 1010110000
Q9 1110010111
F-score 6673585473

ARRIS Group Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 0011000111
Q2 1111111111
Q3 0011000011
Q4 1111111111
Q5 0011000011
Q6 0000000011
Q7 1111000000
Q8 0000000011
Q9 1111111100
F-score 4477333477
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