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AutoZone Inc (NYSE:AZO)
Piotroski F-Score
4 (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

AutoZone Inc has an F-score of 4 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: 4

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 (Nov14) TTM:Last Year (Nov13) TTM:
Net Income was 192.83 + 285.157 + 373.671 + 238.31 = $1,090 Mil.
Cash Flow from Operations was 150.629 + 463.146 + 370.116 + 0 = $984 Mil.
Revenue was 1990.494 + 2341.545 + 3049.696 + 2260.264 = $9,642 Mil.
Gross Profit was 1037.035 + 1216.958 + 1595.216 + 1176.661 = $5,026 Mil.
Average Total Assets from the begining of this year (Nov13)
to the end of this year (Nov14) was
(7023.423 + 7251.908 + 7371.802 + 7517.858 + 7717.101) / 5 = $7376.4184 Mil.
Total Assets at the begining of this year (Nov13) was $7,023 Mil.
Long-Term Debt was $4,422 Mil.
Total Current Assets was $3,708 Mil.
Total Current Liabilities was $5,091 Mil.
Net Income was 176.247 + 265.583 + 371.199 + 218.087 = $1,031 Mil.

Revenue was 1855.198 + 2205.878 + 3095.414 + 2093.578 = $9,250 Mil.
Gross Profit was 961.981 + 1142.713 + 1604.375 + 1085.697 = $4,795 Mil.
Average Total Assets from the begining of last year (Nov12)
to the end of last year (Nov13) was
(6398.039 + 6662.188 + 6783.041 + 6892.089 + 7023.423) / 5 = $6751.756 Mil.
Total Assets at the begining of last year (Nov12) was $6,398 Mil.
Long-Term Debt was $4,013 Mil.
Total Current Assets was $3,370 Mil.
Total Current Liabilities was $4,333 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.

AutoZone Inc's current net income (TTM) was 1,090. ==> 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.

AutoZone Inc's current cash flow from operations (TTM) was 984. ==> 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)/Total Assets at the Beginning of This Year (Nov13)
=1089.968/7023.423
=0.15519042

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Nov12)
=1031.116/6398.039
=0.16116126

AutoZone Inc's return on assets of this year was 0.15519042. AutoZone Inc's return on assets of last year was 0.16116126. ==> 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.

AutoZone Inc's current net income (TTM) was 1,090. AutoZone Inc's current cash flow from operations (TTM) was 984. ==> 984 <= 1,090 ==> 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: Nov14)=Long-Term Debt/Average Total Assets from Nov13 to Nov14
=4422.1/7376.4184
=0.59949148

Gearing (Last Year: Nov13)=Long-Term Debt/Average Total Assets from Nov12 to Nov13
=4013.244/6751.756
=0.59440003

AutoZone Inc's gearing of this year was 0.59949148. AutoZone Inc's gearing of last year was 0.59440003. ==> Last year is lower than this year ==> Score 0.

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: Nov14)=Total Current Assets/Total Current Liabilities
=3707.581/5090.964
=0.72826698

Current Ratio (Last Year: Nov13)=Total Current Assets/Total Current Liabilities
=3370.235/4332.825
=0.77783778

AutoZone Inc's current ratio of this year was 0.72826698. AutoZone Inc's current ratio of last year was 0.77783778. ==> 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 32.8. AutoZone Inc's number of shares in issue last year was 34.7. ==> 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
=5025.87/9641.999
=0.52124772

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=4794.766/9250.068
=0.51834927

AutoZone Inc's gross margin of this year was 0.52124772. AutoZone Inc's gross margin of last year was 0.51834927. ==> 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 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 (Nov13)
=9641.999/7023.423
=1.37283473

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Nov12)
=9250.068/6398.039
=1.44576612

AutoZone Inc's asset turnover of this year was 1.37283473. AutoZone Inc's asset turnover of last year was 1.44576612. ==> 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+0+0+0+1+1+0
=4

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

AutoZone Inc has an F-score of 4 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.

AutoZone Inc Annual Data

Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14
Q1 1111111111
Q2 1111111111
Q3 0001011110
Q4 1111111111
Q5 1110000011
Q6 1001000101
Q7 1111111111
Q8 0111111111
Q9 0000011100
F-score 6667577877

AutoZone Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
Q1 1111111111
Q2 1111111111
Q3 1111111000
Q4 1111111110
Q5 0010110110
Q6 1101001010
Q7 1111111111
Q8 1111111111
Q9 1100000000
F-score 8877777674
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