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AutoZone Inc (NYSE:AZO)
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

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

AZO' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 7

3
8

During the past 13 years, the highest Piotroski F-Score of AutoZone Inc was 8. 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 own currency.

This Year (May14) TTM:Last Year (May13) TTM:
Net Income was 371.199 + 218.087 + 192.83 + 285.157 = $1,067 Mil.
Cash Flow from Operations was 519.147 + 357.343 + 150.629 + 463.146 = $1,490 Mil.
Revenue was 3095.414 + 2093.578 + 1990.494 + 2341.545 = $9,521 Mil.
Gross Profit was 1604.375 + 1085.697 + 1037.035 + 1216.958 = $4,944 Mil.
Average Total Assets from the begining of this year (May13)
to the end of this year (May14) was
(6783.041 + 6892.089 + 7023.423 + 7262.892 + 7371.802) / 5 = $7,067 Mil.
Total Assets was $7,372 Mil.
Long-Term Debt was $4,163 Mil.
Total Current Assets was $3,588 Mil.
Total Current Liabilities was $4,604 Mil.
Net Income was 323.732 + 203.452 + 176.247 + 265.583 = $969 Mil.

Revenue was 2763.586 + 1991.04 + 1855.198 + 2205.878 = $8,816 Mil.
Gross Profit was 1432.395 + 1031.866 + 961.981 + 1142.713 = $4,569 Mil.
Average Total Assets from the begining of last year (May12)
to the end of last year (May13) was
(6148.854 + 6265.639 + 6398.039 + 6662.188 + 6783.041) / 5 = $6,452 Mil.
Total Assets was $6,783 Mil.
Long-Term Debt was $4,001 Mil.
Total Current Assets was $3,178 Mil.
Total Current Liabilities was $3,836 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

AutoZone Inc's current net income (ttm) was 1,067. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

AutoZone Inc's current cash flow from operations (ttm) was 1,490. ==> 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)/Average Total Assets from May13 to May14
=1067.273/7066.6494
=0.15102957

ROA (Last Year)=Net Income (TTM)/Average Total Assets from May12 to May13
=969.014/6451.5522
=0.15019858

AutoZone Inc's return on assets of this year was 0.15102957. AutoZone Inc's return on assets of last year was 0.15019858. ==> 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.

AutoZone Inc's current net income (ttm) was 1,067. AutoZone Inc's current cash flow from operations (ttm) was 1,490. ==> 1,490 > 1,067 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

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

Gearing (This Year: May14)=Long-Term Debt/Total Assets
=4163.244/7371.802
=0.56475255

Gearing (Last Year: May13)=Long-Term Debt/Total Assets
=4001.1/6783.041
=0.58986817

AutoZone Inc's gearing of this year was 0.56475255. AutoZone Inc's gearing of last year was 0.58986817. ==> 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: May14)=Total Current Assets/Total Current Liabilities
=3587.844/4603.952
=0.77929657

Current Ratio (Last Year: May13)=Total Current Assets/Total Current Liabilities
=3178.323/3836.049
=0.82854077

AutoZone Inc's current ratio of this year was 0.77929657. AutoZone Inc's current ratio of last year was 0.82854077. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

AutoZone Inc's number of shares in issue this year was 33.7. AutoZone Inc's number of shares in issue last year was 36.5. ==> 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: TTM)=Gross Profit/Revenue
=4944.065/9521.031
=0.51927832

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=4568.955/8815.702
=0.51827466

AutoZone Inc's gross margin of this year was 0.51927832. AutoZone Inc's gross margin of last year was 0.51827466. ==> 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 average total assets throughout 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)/Average Total Assets from May13 to May14
=9521.031/7066.6494
=1.347319

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from May12 to May13
=8815.702/6451.5522
=1.36644667

AutoZone Inc's asset turnover of this year was 1.347319. AutoZone Inc's asset turnover of last year was 1.36644667. ==> 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+0+1+1+0
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

AutoZone 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.

AutoZone Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
Q1 1111111111
Q2 1111111110
Q3 0011001111
Q4 1111111110
Q5 1110000011
Q6 1001000101
Q7 1111111111
Q8 0111111111
Q9 0011000111
F-score 6688556887

AutoZone Inc Quarterly Data

May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14
Q1 1111111111
Q2 1111111111
Q3 1111010110
Q4 1111111110
Q5 0001011011
Q6 1110100101
Q7 1111111111
Q8 1111111111
Q9 1100000000
F-score 8877676770
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