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Ascena Retail Group Inc (NAS:ASNA)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Ascena Retail Group Inc has an F-score of 5 indicating the company's financial situation is typical for a stable company.

ASNA' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of Ascena Retail Group Inc was 9. The lowest was 3. 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 local exchange's currency.

This Year (Jul16) TTM:Last Year (Jul15) TTM:
Net Income was -18.1 + -22.6 + 15 + 13.8 = $-12 Mil.
Cash Flow from Operations was -46.4 + 207.6 + 2.2 + 282 = $445 Mil.
Revenue was 1672 + 1841.8 + 1669.3 + 1812.3 = $6,995 Mil.
Gross Profit was 896.1 + 958.1 + 1016.7 + 1041.3 = $3,912 Mil.
Average Total Assets from the begining of this year (Jul15)
to the end of this year (Jul16) was
(2906.2 + 5805.5 + 5477.1 + 5485.2 + 5506.3) / 5 = $5036.06 Mil.
Total Assets at the begining of this year (Jul15) was $2,906 Mil.
Long-Term Debt was $1,982 Mil.
Total Current Assets was $1,240 Mil.
Total Current Liabilities was $1,014 Mil.
Net Income was 53.5 + 8.7 + 24.4 + -323.4 = $-237 Mil.

Revenue was 1194.2 + 1288.6 + 1150.3 + 1169.8 = $4,803 Mil.
Gross Profit was 694.5 + 662 + 675.1 + 637.6 = $2,669 Mil.
Average Total Assets from the begining of last year (Jul14)
to the end of last year (Jul15) was
(3123.8 + 3233.3 + 3114.5 + 3220.4 + 2906.2) / 5 = $3119.64 Mil.
Total Assets at the begining of last year (Jul14) was $3,124 Mil.
Long-Term Debt was $348 Mil.
Total Current Assets was $950 Mil.
Total Current Liabilities was $718 Mil.

Profitability

Question 1. 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.

Ascena Retail Group Inc's current net income (TTM) was -12. ==> Negative ==> Score 0.

Question 2. 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.

Ascena Retail Group Inc's current cash flow from operations (TTM) was 445. ==> Positive ==> Score 1.

Question 3. 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)/Total Assets at the Beginning of This Year (Jul15)
=-11.9/2906.2
=-0.00409469

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jul14)
=-236.8/3123.8
=-0.07580511

Ascena Retail Group Inc's return on assets of this year was -0.00409469. Ascena Retail Group Inc's return on assets of last year was -0.07580511. ==> This year is higher. ==> Score 1.

Question 4. 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.

Ascena Retail Group Inc's current net income (TTM) was -12. Ascena Retail Group Inc's current cash flow from operations (TTM) was 445. ==> 445 > -12 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. 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: Jul16)=Long-Term Debt/Average Total Assets from Jul15 to Jul16
=1981.6/5036.06
=0.39348221

Gearing (Last Year: Jul15)=Long-Term Debt/Average Total Assets from Jul14 to Jul15
=347.9/3119.64
=0.11151928

Ascena Retail Group Inc's gearing of this year was 0.39348221. Ascena Retail Group Inc's gearing of last year was 0.11151928. ==> Last year is lower than this year ==> Score 0.

Question 6. 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: Jul16)=Total Current Assets/Total Current Liabilities
=1240/1013.7
=1.22324159

Current Ratio (Last Year: Jul15)=Total Current Assets/Total Current Liabilities
=949.9/717.7
=1.32353351

Ascena Retail Group Inc's current ratio of this year was 1.22324159. Ascena Retail Group Inc's current ratio of last year was 1.32353351. ==> Last year's current ratio is higher ==> Score 0.

Question 7. 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.

Ascena Retail Group Inc's number of shares in issue this year was 192.2. Ascena Retail Group Inc's number of shares in issue last year was 162.6. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. 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
=3912.2/6995.4
=0.55925322

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2669.2/4802.9
=0.55574757

Ascena Retail Group Inc's gross margin of this year was 0.55925322. Ascena Retail Group Inc's gross margin of last year was 0.55574757. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year 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 (TTM)/Total Assets at the Beginning of This Year (Jul15)
=6995.4/2906.2
=2.40706077

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jul14)
=4802.9/3123.8
=1.53751841

Ascena Retail Group Inc's asset turnover of this year was 2.40706077. Ascena Retail Group Inc's asset turnover of last year was 1.53751841. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+1+1+0+0+0+1+1
=5

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Ascena Retail Group Inc 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 local exchange's currency.

Ascena Retail Group Inc Annual Data

Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14Jul15Jul16
Question 1 1111111100
Question 2 1111111111
Question 3 1001000001
Question 4 1111111111
Question 5 1110101010
Question 6 1111001000
Question 7 0110010010
Question 8 1001100111
Question 9 0001010001
F-score 7667555455

Ascena Retail Group Inc Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
Question 1 1111100000
Question 2 1111111111
Question 3 0000000001
Question 4 1111111111
Question 5 1001110000
Question 6 0011000000
Question 7 0001010000
Question 8 0111110001
Question 9 0000001111
F-score 4457553335
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