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

The zones of discrimination were as such:

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

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

ASNA' s 10-Year Piotroski F-Score Range
Min: 4   Max: 9
Current: 5

4
9

During the past 13 years, the highest Piotroski F-Score of Ascena Retail Group, Inc. was 9. The lowest was 4. 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 own currency.

This Year (Jan14) TTM:Last Year (Jan13) TTM:
Net Income was 31.9 + 52.6 + 29.8 + 31.2 = $146 Mil.
Cash Flow from Operations was 134.2 + 41 + 116.8 + 59.8 = $352 Mil.
Revenue was 1266.5 + 1196.6 + 1197.7 + 1142.2 = $4,803 Mil.
Gross Profit was 688.3 + 710 + 671.6 + 657.8 = $2,728 Mil.
Total Assets at the begining of this year (Jan13) was $2,883 Mil.
Total Assets was $2,983 Mil.
Long-Term Debt was $131 Mil.
Total Current Assets was $901 Mil.
Total Current Liabilities was $639 Mil.
Net Income was 47.2 + 43.1 + 1.6 + 49.4 = $141 Mil.

Revenue was 1237.5 + 1137.5 + 939.7 + 783.3 = $4,098 Mil.
Gross Profit was 662.1 + 656.6 + 501.6 + 459.9 = $2,280 Mil.
Total Assets at the begining of last year (Jan12) was $1,921 Mil.
Total Assets was $2,883 Mil.
Long-Term Debt was $515 Mil.
Total Current Assets was $1,114 Mil.
Total Current Liabilities was $634 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.

Ascena Retail Group, Inc.'s current net income was 146. ==> 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.

Ascena Retail Group, Inc.'s current cash flow from operations was 352. ==> 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)
=145.5/2883
=0.05046826

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jan12)
=141.3/1921.1
=0.07355161

Ascena Retail Group, Inc.'s return on assets of this year was 0.05046826. Ascena Retail Group, Inc.'s return on assets of last year was 0.07355161. ==> 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.

Ascena Retail Group, Inc.'s current net income was 146. Ascena Retail Group, Inc.'s current cash flow from operations was 352. ==> 352 > 146 ==> 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
=131/2983.2
=0.04391258

Gearing (Last Year)=Long-Term Debt/Total Assets
=514.6/2883
=0.17849462

Ascena Retail Group, Inc.'s gearing of this year was 0.04391258. Ascena Retail Group, Inc.'s gearing of last year was 0.17849462. ==> 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
=901.4/639
=1.41064163

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1114/633.5
=1.75848461

Ascena Retail Group, Inc.'s current ratio of this year was 1.41064163. Ascena Retail Group, Inc.'s current ratio of last year was 1.75848461. ==> 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.

Ascena Retail Group, Inc.'s number of shares in issue this year was 164.9. Ascena Retail Group, Inc.'s number of shares in issue last year was 162.9. ==> 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
=2727.7/4803
=0.56791589

Gross Margin (Last Year)=Gross Profit/Revenue
=2280.2/4098
=0.55641776

Ascena Retail Group, Inc.'s gross margin of this year was 0.56791589. Ascena Retail Group, Inc.'s gross margin of last year was 0.55641776. ==> 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)
=4803/2883
=1.66597294

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jan12)
=4098/1921.1
=2.13315288

Ascena Retail Group, Inc.'s asset turnover of this year was 1.66597294. Ascena Retail Group, Inc.'s asset turnover of last year was 2.13315288. ==> 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+1+0+0+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

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 own currency.

Ascena Retail Group, Inc. Annual Data

Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13
Q1 1111111111
Q2 1111111111
Q3 1111001000
Q4 1111111111
Q5 1011110101
Q6 1001111000
Q7 1000110010
Q8 1111001101
Q9 1100001010
F-score 9667667555

Ascena Retail Group, Inc. Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Q1 1111111111
Q2 1111111111
Q3 0100000000
Q4 1111111111
Q5 0110000111
Q6 0110000010
Q7 1110000000
Q8 1110000111
Q9 0101111000
F-score 5974444565
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